Aussie weakens mildly today after RBA minutes showed that interest rates will likely be on hold in the foreseeable future. It note that "given this outlook for the economy and the significant degree of monetary stimulus already in place to support economic activity, the board judged that the current accommodative stance of policy was likely to be appropriate for some time yet." The central bank said that pace of growth will likely be "a little below trend" for the rest of the year. There will be "substantial falls in mining investment, "below-average growth of public demand" and subdued non-mining investment. Regarding the exchange change, RBA reiterated that it remained high by historical standards.
The IMF lowered growth forecast of US this year sharply to 2.0%, down from April's projection of 2.8%. 2015 growth projection was left unchanged at 3.0%. The cut in forecast was mainly due to contraction in Q1 on harsh winter weather. IMF also noted that "relatively high unemployment and a lot of slack in the labor market" to persist", and consumer inflation will remain well below the 2% target into 2017. Regarding monetary policy, IMF said Fed's policy rates could " afford to stay at zero for longer than the mid-2015 date currently foreseen by markets". Last week, the World Bank lowered US 2014 growth forecast to 2.1%, down from prior projection of 2.8%.
On the data front, UK inflation data will be a major focus today. CPI is expected to drop back to 1.7% yoy in May while core CPI is expected to drop to 1.7% Yoy too. UK will also release RPI and PPI. Sterling has been strong since the hawkish comments from BoE governor Carney last week but it's starting to lose some momentum. The pound needs some more positive data to give it the fuel to extend rally. Elsewhere, Germany will release ZEW economic sentiment. US will release CPI and new residential construction.