Asia Markets Prepare for RBA Rate Hike, China PMI Data
The Reserve Bank of Australia (RBA) is expected to raise interest rates by 25 basis points on Tuesday, according to market forecasts. This decision comes as the Australian economy continues to run hot, with tight labour market conditions and strong second-quarter GDP growth contributing to inflationary pressures.
The RBA's decision will be influenced by recent inflation readings, which have come in stronger than expected. August CPI data is likely to show a further acceleration to 4.1% year-on-year, driven primarily by higher diesel and food prices.
Other Asian economies are also set for key releases next week. In China, the National Bureau of Statistics will release September purchasing managers' index (PMI) data on Wednesday, which is expected to show a slight recovery in manufacturing and non-manufacturing PMIs.
In Japan, activity and inflation data will be in focus, with market consensus expecting services inflation to remain unchanged at 3.6% YoY. Retail sales growth is forecast to moderate to 3.2% YoY, while industrial production is expected to rebound 1.4% MoM.