The Day Ahead: Top 3 things to watch

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Investing.com – Here’s a preview of the top 3 things that could rock markets tomorrow

Reserve Bank of Australia to leave rates unchanged?

It’s widely expected that the Reserve Bank of Australia (RBA) will stand pat on interest rates, keeping its benchmark rate steady at 1.50%, as the central bank seeks to assess how its earlier rate cuts are filtering through the economy.

The RBA previously slashed interest rates in August last year in an effort to boost economic activity amid concerns over weak inflation and wages growth.

Traders will carefully parse the policy statement for fresh insight into the central bank’s thinking about the pace of economic expansion and inflation.

Ahead of the interest rate decision, AUD/USD eased from lows to $0.8002, up 0.20%.

US macro data to stem the rot the in dollar?

U.S. inflation data on Tuesday will be the most closely watched economic data release during the session, as it’s the first set of inflation figures since the Federal Reserve left interest rates unchanged in July.

Core PCE, a key measure of inflation the Fed considers in its interest rate decisions, is expected show a dip to 1.3% year-over-year in June.

Later during the session, investors will turn attention to the Institute for Supply Management’s purchasing managers index (PMI) data for July.

Economists forecast a reading of 56.5, down from 57.8 in the prior month.

The dollar has slumped to 14-month lows against its rivals amid growing doubts the Federal Reserve will hike rates later this year, as inflation has struggled to pick up pace.

UK manufacturing data on tap

Ahead of the Bank of England’s rate decision slated for Thursday, investors are expected to monitor manufacturing data due Tuesday for any signs of continued weakness in UK manufacturing activity, which fell in June for the first time in two months.

Analysts expect UK manufacturing activity to show reading of 54.4, up slightly from 54.3 in the previous month.

GBP/USD traded roughly flat at $1.3211.

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