The minutes of the June Reserve Bank Board meeting continued to provide an underwhelming assessment of the domestic economy. The RBA maintained its view that growth remains below trend but was slightly more upbeat with their assessment of non-mining investment and the labour market. There was still the hint that the RBA was open to further easing of monetary policy, but continue to point to a period of waiting to assess developments, suggesting that the RBA will sit on the sidelines over the near-term.
Market volatility is set to continue this week as we see investors make last minute trades to position portfolios ahead of the financial year-end, as well as the ongoing negotiations in Europe around the Greek debt crisis. Despite weeks of negotiations, an agreement on a new bailout for Greece has yet to be reached. EU Leaders (Presidents and Prime Ministers) are meeting this Monday night where a decision on a Greek bailout will be reached. This would allow the ECB to keep the Greek banking system afloat and Greece to have the funds to meet upcoming debt repayments.