On Wednesday at 03:30 GMT+3: Australian inflation data for Q3 will become known. Consumer price index (CPI) in Q2 was at the level of 0.4%. It is expected that the index will remain at the same level in Q3 (+1.1% on annual basis, which is a modest figure. CPI is the most important factor affecting consumer trends and the most important inflation indicator, which is considered by the RBA for making monetary policy plans. If the index is below the forecast, Central Bank of Australia may consider possibility of lowering interest rates.
Last week RBA Governor, Philip Lowe, has said that the rate will be lowered only if inflation remains weak for long period of time, labour market deteriorates and the housing market drops significantly.
On October 4, the RBA kept interest rates at 1.5%, which is one of the highest levels in the world among countries with advanced economies. The Australian economy remains one of the most stable in the world. This fact increases investors’ interest to the purchase of the Australian assets and currency. Economists expect that the RBA will not change interest rate until mid-2017, which will support the Australian dollar in the medium term.
Today’s news today will include speeches of the Fed representatives: at 16:05 (GMT+3) William Dudley and James Bullard will give their speeches, and at 20:30 and 21:00 – Charles Evans and Jerome Powell. In their speeches, the Fed officials give their opinions, which may increase volatility in the financial markets.