Concerning the AUD, investors will keep a watchful eye on the eight releases out of both Australia and China today. The figures are ranging from two sets of Service Purchasing Managers Index (PMI) data and two sets of Manufacturing PMI data; these are all due out from China at 11pm onwards. In addition, from Australia we have Building Approvals, Current account and finally the Reserve Bank of Australia will make their rate announcement and subsequent Monetary Statement.
China’s manufacturing PMI release tends to have much more of an effect on the AUD than the service PMI release; as it holds a stronger correlation with economic health within China also Australia’s exports of raw minerals. The manufacturing data releases today, are a result of two researchers, Markit and The China Federations of Logistics and Purchasing (CFLP). Both figures are expected to be revised down; in particular they are both expected to be below the indicated expansion points (<50). This should not lend any buoyancy to the AUD today, if the expectations are realised.
The Building Approvals release out of Australia today will be a strong leading indicator of future Gross Domestic Product in Australia. The figure is expected to push into expansion levels this month; at a month on month figure of 2.9% from -8.2% last month.
The Current Account out of Australia today is expected to be released at -15.9 billion; this has been the average for the last four years. This is because the mining sector has started to lag, caused by a drop in raw commodity prices. Abnormally, Australian exports have found little support as a result of the recent depreciation of the AUD, in theory this should have shown improvement in the figure. However, a slowdown in China may have negated this effect.
Lastly the RBA is deciding whether to cut rates this month at 2.30pm. According to the 30 Day Interbank Cash Rate Futures market for September, there is a 94% chance that the Cash Rate will remain on 2%. The accompanying comments from Glenn Stevens, Governor of the RBA, are expected to fuel plenty of speculation on future momentary policy and stock market financial stability. All in all, this will be a very busy day for the AUD so expect plenty of volatility!