[ForexNews]

RBA Board Meeting Rate Decision - July 7

While some expect the RBA to deliver another steady cash rate decision (3.0%) following this Tuesday’s July board meeting, it is also likely to confirm a clear easing bias and scope for lower rates if necessary. Domestic and global data since the board last met have been mixed, with the local data highlighting some policy traction in housing and consumption but also confirming a hit to export income from the global recession. But the labour market remains soft and headline inflation has dropped into the RBA’s target range and is likely to trend lower over the next year or so. A slow improvement in global financial and credit markets will persuade the RBA to stay sidelined next week and in the coming months, but any upward adjustment in cash rates is still some way off.

BOE MPC Rate Decision - July 9

The MPC is expected to keep rates on hold at 0.5% at the July meeting with attention again focussed on QE plans. The MPC is likely to acknowledge that growth has been even weaker than expected and while there are some marginally encouraging signs going forward, notably the Q2/09 credit conditions survey, the economic and financial backdrop remains extremely fragile. Consequently, analysts expect that the Committee will vote to use the remaining £25bn of its £150bn QE pot at the July meeting and could very well petition the Treasury for further funds or, at very least, signal to the markets that an extension to the program is likely. Even so, the market conclusion may be that we are now in the process of slowing the pace of the program down.

Canadian Employment Report - July 10

Canadian employment resumed its downward trajectory in May, falling 41.8K after the unexpected 35.9K upward blip in April. The deterioration was largely concentrated in the manufacturing component which was hit by major shutdowns of various motor vehicle production facilities. In June, market expects the pace of job declines to moderate slightly to 26k, as the weakness seen in the auto sector becomes less pronounced. This would bring total job losses since October 2008 to 390k (2.2 % of total employment). Although this figure still pales in comparison to the U.S,. where 5 million jobs were lost during the same period (3.7% of total employed), it does represent a stretch not seen since the very depths of the 1990-91 and 1981-82 recessions. The unemployment rate is expected to continue its year-long uptrend, rising 0.2% to 8.6%.