Weak Australian job advertisements, declining corporate profits and tame inflation data have all increased the possibility of an RBA rate cut at tomorrow's monthly central bank meeting in Sydney. Australian job advertisements declined by -2.4% versus -0.8% the period prior suggesting that labor conditions Down Under continue to deteriorate. Meanwhile corporate profits continued to contract decreasing by 4.0% versus -2.1% eyed. At the same time inflation expectations have been tempered with M1 Inflation gauge remaining flat at 0.0% versus 0.3% rise the month prior.
The overall slowdown in business activity in Australian economy has led most economists to predict that the RBA will ease once again at tomorrow's monthly meeting. According to the Wall Street Journal poll six out of 20 respondents now expect a rate cut of as much as 50bp, ten economists forecast a rate cut of 25bp and only four expect the RBA to remain stationary.
The Aussie remained relatively quiet in Asian session trade trading around the .9650 level after opening the week’s trade as high as .9710. With London out on bank holiday trading is likely to remain subdued in early European trade until US traders come online later in the day.