Data supports RBA keeping rates powder dry

It has been a truly mixed bag of data releases this week. We saw retail sales looking optimistic against expectations. Unemployment rates tracked up to historic highs, but full-time participation beat. New home sales recovered but home loans failed expectations at 4.4%. The Statement of Monetary Policy saw GDP lower, unemployment likely to have peaked, and inflation moving higher. Capping all of these off was the announcement of a new 2040 Treasury Indexed Bond syndication of $1.25 bn next week. 90 day Bank Bill futures have generally pushed lower by 7-9 bps across the strip with plenty of activity in shorter dated paper. Three- and Ten-year Bond futures have pushed downward with yields 17 bps higher from the peak of the week. AUD has had a schizophrenic week with decent swings over data points, but generally finishing firmer. On balance it increasingly looks like the RBA will stand firm on current rates. The release of US Non-Farm Payrolls tonight nicely finishes off the week with all eyes on the Fed and possible lift off on rates.