On Tuesday the Reserve Bank of Australia (RBA) will meet for an interest rate decision and have a meeting. Many are expecting no change in policy and in light of some recent economic numbers, some investors are expecting the debate within the bank to start to hinge towards the possibility of rate hikes and less away from the timing of the next cut. The shift from a loosening to tightening policy will depend more on the outlooks from China and their needs for commodities than domestic growth in the country.
China will come out with their manufacturing numbers early Tuesday followed by Europe and the UK (the US numbers are today). Watchin these numbers, coupled with Australia's reliance on the commodity sector growth (and inflation) it would be wise to track these numbers, especially in the APAC region.
The RBA mentioning in their meeting about the recent rise in inflation could spur the Aussie dollar to strengthen back down to levels seen after the US elections when the reflation trade was in full swing. The anticipation of higher interest rates would make the currency more attractive and could help stem the growth in debt levels that are keeping many investors on the sidelines in terms of longer term investment in the country.