Week Ahead: Markets to Focus on RBA Rate Statement and BOC Rate Statement

September 4, 2023

The financial world is keeping a close watch on some important economic news this week. Two major central banks, the Reserve Bank of Australia (RBA) and the Bank of Canada (BOC), will be releasing their rate statements. Given the potential for increased market volatility, we advise traders to exercise caution and stay mindful of their trading strategies.

Here are some notable highlights for the upcoming week:

Reserve Bank of Australia Rate Statement (5 September 2023) 

The Reserve Bank of Australia held its cash rate steady at 4.1% during its August meeting, continuing the rate pause for the second consecutive month. 

The central bank is set to announce the next interest rate adjustment on 5 September, and analysts anticipate that the RBA will maintain its rate at 4.1%.

Australia Quarterly Gross Domestic Product (6 September 2023) 

The Australian economy saw a 0.2% quarter-on-quarter expansion in Q1 2023, following a 0.6% increase in Q4 2022.

The figures for Q2 2023 are scheduled for release on 6 September, with analysts predicting another 0.2% increase in the GDP. 

Bank of Canada Rate Statement (6 September 2023)

The Bank of Canada (BOC) increased the target for its overnight rate by 25 bps to 5% in July 2023. This move followed a surprising 25 bps rate hike in the previous meeting and extended the bank’s tightening cycle, which had briefly paused in March and April. 

The next rate statement is scheduled for release on 6 September, and analysts expect the BOC to maintain its interest rates at 5%.

US ISM Services PMI (6 September 2023)

The US Institute of Supply Management (ISM) Non-Manufacturing Purchasing Managers’ Index, also known as the US ISM Services PMI, fell to 52.7 in July 2023. This follows a four-month high of 53.9 in June. 

The ISM’s data for August 2023 is scheduled for release on 6 September, with analysts anticipating a slight decrease to 52.6.

Canada Unemployment Rate (8 September 2023)

The Canadian unemployment rate edged higher to 5.5% in July 2023 from 5.4% in the previous month, marking the third consecutive increase to levels last seen in January 2022. This reflects some softening in the Canadian labour market. 

The figures for August are set to be released on 8 September, with analysts anticipating that the unemployment rate will remain at 5.5%.