RBA Decision Looms as US Housing Market Weighed Down by Affordability Pressures

This week's market outlook is relatively calm, with no significant economic events scheduled for Monday. However, things pick up on Tuesday as the Reserve Bank of Australia announces its monetary policy decision and releases new data on existing home sales in the US.

The RBA is expected to keep interest rates at 4.35%, following recent inflation data that came in below expectations. While this may suggest a hold on rate hikes, underlying price pressures remain elevated, prompting the Bank to maintain a hawkish tone. Some analysts predict a 25 bps rate hike at the September meeting.

In the US, existing home sales are forecasted to decline by 2.2% in July, weighed down by affordability pressures and rising mortgage rates. The consensus for core CPI is 0.2%, while headline CPI is expected to ease from 3.5% to 3.4%. With another CPI report due before the September meeting, traders will closely monitor the data.

In the UK, GDP growth is expected to slow down in June, following a strong Q2 performance. Survey-based indicators suggest economic activity may have moderated, while seasonal adjustment might have contributed to reported strength earlier in the year.