Also in the frame yesterday was an uninspiring retail sales report showing June's solid increase on the back of government subsidies couldn't be sustained. Retail sales slumped 0.8 percent in July from a 1.2 percent rise in June. Expectations were for a moderate rise of 0.2 percent. The fall in the latest ANZ jobs ads report is also seen as a negative precursor ahead of Thursday's official employment print. Yesterday's release showed job ads fell 2.3 percent in August from a fall of 0.8 percent in July.
The day ahead will see the RBA policy meeting take centre stage at 14:30 AEST which is widely expected to see interest rates remain on hold at 3.5 percent. Nevertheless, after a series of sub-par economic releases in recent days, today's RBA policy statement may take on a tad more dovish tone than seen in recent correspondence. Market participants will be watching closely the ensuing statement for any downgrade from the previous statement and the recent policy meeting minutes which noted China was showing "tentative signs that growth was stabilising at a more sustainable pace." The statement may also express concern over how falling terms of trade may impact on national income. Also on today's docket is the second-quarter current account and net exports of GDP.
It's clear there's a hybrid of negative themes guiding the Aussie dollar with a notable decline in Australia's key commodity exports such as iron ore taking on increased priority amid further signs the Chinese economy is coming off the boil. Still, the prospect of further U.S stimulus may continue to provide a tentative foundation should we see data out of the region print to the weaker side of expectations this week, but on the flip side the risk of a material unwinding of stimulus expectations is high should we see U.S data releases strike a positive tone, placing the local unit at risk of a deeper correction. At the time of writing the Australian dollar is buying 102.4 US cents.
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