Rates Hike on the Table as RBA Announces Policy Decision Amid US Economic Resilience

The upcoming week in financial markets promises to be eventful, with several key releases and announcements set to shape investor sentiment. On Tuesday, the Reserve Bank of Australia (RBA) will make its monetary policy announcement, with a widely expected rate hike of 25 basis points to 4.60%.

Additionally, Canada's GDP growth for August will be released, as well as the US CB consumer confidence and JOLTS job openings prints. The RBA is anticipated to maintain a hawkish tone due to persistent inflation and a resilient labor market, with Governor Bullock previously stating that inflation risks are 'materializing.'

On Wednesday, Australia's inflation data will be released, following the RBA meeting, while the US will release its ADP non-farm employment change, core PCE price index m/m, and final GDP q/q.

Thursday will bring the US unemployment claims and ISM manufacturing PMI, while on Friday, Tokyo core CPI y/y, eurozone inflation figures, and US average hourly earnings m/m, non-farm employment change, and unemployment rate will be released.

The US economy is expected to show resilience, with consumer spending remaining a key driver. The PCE report, along with the third estimate of Q2 GDP, will provide insight into income, spending, savings, and inflation trends. Methodological changes are expected to point to a softer near-term inflation trend.