Consumer price inflation is expected to have reached +2.2% in the second quarter of 2017, up from a prior reading of +2.1%, according to market estimates, and at the lower end of the central bank’s +2-3% target range (y/y). The RBA’s target is defined as a medium-term average to allow for any unseen circumstances and for lags in the effects of monetary policy. Inflation is expected to be pushed higher by rising commodity prices boosting domestic income and expenditure. With inflation levels still low – Q4’16 figures (just two data periods ago) were the lowest in 19 years – interest rate hikes are still a way off, although some believe that the current 1.50% cash rate will be the low of the current economic cycle.

Pairs to Watch: AUD/JPY, AUD/NZD, AUD/USD

07/26 Wednesday | 08:30 GMT | GBP Gross Domestic Product (Q2)

The first look at Q21’7 UK GDP is expected to show the UK economy grew +1.7%, down from a prior rateof +2.0% (annualized). The quarter-on-quarter figure however is expected to show a slight pickup to +0.3% from a prior +0.2%.The mixed back may be evident of the potential effects of Brexit flowing through into official figures. The latest retail sales figures, released last week and included in Q2’17 GDP data, posted a rebound to +3% from +0.6% (y/y), which bodes well for GDP. A combination of stagnating wage growth and rising inflation had crimped consumer expenditure, until recently the prime growth driver in post-Brexit UK.

The preliminary UK GDP reading is published around 25 days after the end of the quarter and is based on 44% of actual data. The second estimate is released around seven and a half weeks after the end of the quarter and is based on around 80% of actual data. The third estimate is released 90 days after the quarter’s end and is based on around 91% of actual data.