Australian one dollar coins
A handful of Australian one dollar coins is shown in Sydney, February 18, 2004. Reuters/Tim Wimborne

Bell FX Currency Outlook: Sentiment improved, sendingstocks and commodities higher. Oil rallied sharply, with WTI crude oil prices pushing above USD40/barrel.

Australia: With no Australian data today the focus will be this weekend’s Annual Kansas City Fed’s Jackson Hole symposium. This year’s theme is ‘Inflation Dynamics and Monetary Policy’. With economies still runningbelow (past) potential and commodity prices declining, the ability to hitinflation targets and thus justify normalising interest rates is a very pertinent topic. Yesterday Australia capital expenditure data for Q2showed a greater than expected decline for the quarter. There was a pickup in the expected capex for the third estimate of 2015/16, although it remains well below that of the 2014/15 equivalent. In this sensitive timefor markets, today’s lack of data means we will once again take the leadfrom China and offshore.

Majors: Q2 GDP growth was revised up to a 3.7% annualised rate (mkt:3.2%) against the advanced estimate of 2.3% reported last month. This data shows an economy that was growing well above trend in Q2 and isconsistent with the labour market improvement over this period. It suggests underlying momentum in the economy remains solid and is unlikely to be substantively impacted by the recent bout of financial market volatility unless the recent weakening in equity markets becomes more persistent. The Chinese equity market rallied hard into the close yesterday as investors got behind the idea that the Chinese pension fundswere about to invest in the local market and there was talk of more official assistance.

Economic Calendar 28 AUG

  • UK GfK Consumer Confidence
  • JN Jobless Rate
  • JN Retail trade MoM/YoY
  • EC Consumer Confidence

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