Economic wrap: commodity bloc in focus - Westpac

Analysts at Westpac offered an economic wrap.

Key Quotes:

"The Bank of Canada kept its policy rate on hold at 0.5%, which was widely expected, but its tone was more dovish than expected. BoC is on balance still neutral but doubts are beginning to creep in. They still expect a big bounce back in H2 as the disruptions from wildfires in Alberta fade and as fiscal stimulus kicks in. But there were a couple of more cautionary comments in the statement, that weren't there in the previous, suggesting they perhaps see things "half empty" rather than 'half full" ie: "While the strength in exports during July was encouraging, the ground lost over previous months raises the possibility that the profile for economic activity will be somewhat lower than anticipated in July." and "On balance, risks to the profile for inflation have tilted somewhat to the downside".

The Fed’s Beige Book of regional economic conditions repeated its “modest-moderate” mantra regarding economic expansion, and expected that trend to continue.

US JOLTS job openings rose from 5643 to 5871 (vs 5630 expected). This is a solid result and a big relief for Fed Chair Yellen. Job openings jumped around 230k to 5871 – a new all-time high for this survey. As for the job openings rate it was solid too, but below prior cycle highs:

Economic Event Risks Today

RBA Governor designate Lowe makes opening remarks at a conference in Sydney.

Australia’s trade balance for July should reverse June's blowout and narrow back to -$2.4bn. June's import surge is unsustainable.

China’s trade and FDI data is due today. July’s import deterioration should reverse. Exports are only marginally stronger.

The ECB meets. An extension of program timing is due soon, but probably not quite yet. Big questions remain around the potential scale of asset purchases."