RBNZ under Pressure to Cut Rates, RBA and BOE Minutes

• Reserve Bank of Australia to publish minutes
• Bank of England to release last time deferred minutes
• Reserve Bank of New Zealand to announce interest rate

RBA Minutes and Governor Speech Will Make Case for Weaker AUD

The Reserve Bank of Australia (RBA) held interest rates on July 7, 2015 at 2 percent the minutes from that meeting will be release on Monday, July 20 at 9:30 pm EDT. RBA Governor Glenn Stevens mentioned that the global slowdown and increased supply of commodities had hit Australian trade hard. The statement by the RBA Governor was dovish but with no action but if the move by the Bank of Canada to cut its benchmark rate to 0.50 percent is any indication the pressure is on the Australian central bank to follow suit. The minutes of the meeting will likely show that although the rate was held there is a rising probability of an upcoming rate cut. The delay from the U.S. Federal Reserve to hike interest rates will force other central bank into action in order to give their economies a competitive advantage. Governor Stevens will have a chance to drive the AUD lower as he is due to speak at the Anika Foundation Luncheon on Tuesday, July 21.

BoE to Publish Minutes Along with Rate Announcements Going Forward

The Monetary Policy Committee is expected to have voted unanimously to keep rates on hold back in July 9, 2015. The minutes will show if the comments from earlier today from BoE Governor Mark Carney stem from conversations at MPC meeting or if its a new development. BoE Chief Economist Andy Haldane remains dovish on the U.K. economy while Carney’s comments speak of an optimistic outlook that could sustain higher rates before the end of the year. This contrasts with Haldane’s view of the risks of an early lift off. The GBP was boosted by Carney’s comments and would get another lift if the MPC votes showed a couple of members have started to diverge from the pack. The minutes will be released on Wednesday, July 22 at 4:30 am EDT. This will mark the last MPC minutes that are released two weeks after the rate statement as the Old Lady will move to a immediate release following the rate announcement starting in August.

RBNZ Could Cut Cash Rate as Milk Price Drops

Milk prices have hit a six year low ahead of the Reserve Bank of New Zealand rate announcement meeting. The RBNZ is expected to lower rates by as much as 50 basis points to battle low inflation and lower commodity prices. The Official Cash Rate (OCR) stands at 3.00 percent. The OCR’s record low is 2.5 percent which could be touched again if the RBNZ decides on sending a strong signal to the market. Given the lack of urgency from the U.S. Fed a 25 basis points is also on the table to leave room to cut further down the road if needed.

Central Bank events to watch this week:

Monday, July 20
9:30pm AUD Monetary Policy Meeting Minutes
Tuesday, July 21
11:05pm AUD RBA Gov Stevens Speaks
Wednesday, July 22
4:30am GBP MPC Official Bank Rate Votes
5:00pm NZD RBNZ Rate Statement

*All times EDT
For a complete list of scheduled events in the forex market visit the MarketPulse Economic Calendar

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