Aussie dips broadly today as RBA minutes indicate that the central bank is open for further policy easing in August. The minutes noted that recent data were "consistent with a moderation of GDP growth following the stronger-then-expected outcome". And, "inflation was still expected to remain quite low for some time." Also, "forward-looking indicators of employment had been slightly weaker over recent months following gains over the preceding year." Meanwhile, "measures of inflation expectations -- from consumers, market economists, union officials and financial markets -- had remained below average." RBA also warned that "an appreciating exchange rate could complicate the necessary economic adjustments."
RBA concluded that "further information on inflationary pressures, the labour market, and housing activity would be available over the following month." And "staff would provide an update of their forecasts ahead of the August Statement on Monetary Policy." Hence, "this information would allow the board to refine its assessment of the outlook for growth and inflation to make any adjustment to the stance of policy that may be appropriate." Currently, markets are pricing in around 60% chance of a cut in August but the decision would very much depend on Q2 inflation data to be released on July 27.
Elsewhere, UK inflation data will be a focus in European session. CPI is expected to rise to 0.4% yoy in June while core CPI is also expected to rise to 1.3% yoy. UK will also release RPI and PPI. Another focus in European session is German ZEW economic sentiment, which is expected to drop sharply to 9.1 in July. Eurozone ZEW economic sentiment is also expected to drop sharply to 12.3. US will release housing starts and building permits later in the day.