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Is the RBA about to cut interest rates?

Wall Street markets were slightly lower overnight thanks to retail sales falling for the third straight month. The Dow Jones Industrial Average was down 0.4%%, the S&P 500 Index lost 0.2% and the Nasdaq Composite Index shed 0.4%. US retail sales fell 0.5%, but analysts had been expecting a small rise.

European markets were flat, with the UK’s FTSE 100 losing just 0.1%, Germany’s DAX adding 0.1% and Paris’ CAC 40 unchanged. In Asia, Chinese stocks have fallen to a three year low, on signs of further slowing growth.

The Australian dollar was up slightly against the US dollar, buying 102.4 US cents.

Commodities markets were flat overnight, as traders seem to be awaiting US Federal Reserve chairman Ben Bernanke’s speech to US lawmakers on the state of the US economy.

The Futures are cloudy

In economic news, the RBA will release its July board minutes today, which should give some indication of the Board’ thinking. Analysts and investors will be combing the minutes for any clues as to the chance of an August rate cut. Bank investors in particular will be watching, as signs of further easing may have an effect on the shares in Commonwealth Bank of Australia (ASX: CBA) ,Westpac Banking Corporation (ASX: WBC)Australian and New Zealand Banking Group (ASX: ANZ) and National Australia Bank (ASX: NAB).

The Australian Bureau of Statistics will release motor vehicle sales, with consensus expectations of a lift.

The ASX SPI futures was up 1 point, suggesting the S&P / ASX 200 (Index: ^AXJO) is likely to be swayed by Australian economic data out today, and quarterly reports from big iron ore miners Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Limited (ASX: RIO).

Whitehaven Coal (ASX: WHC) could be in focus again today, given the large price differential between Nathan Tinkler’s $5.20 takeover offer price and the last traded price of $4.07, which is already up 18% after the takeover was announced. Speculation is mounting as to whether he can secure enough funding to push the takeover through.

According to the Australian Financial Review, Kerry Stokes’ Seven Group Holdings (ASX: SVW) may be selling its Telstra Corporation  (ASX: TLS) shares in order to fund its share of Seven West Media’s (ASX: SWM) $440m capital raising.

Foolish takeaway

Many investors may be eagerly awaiting the US government’s quarterly report on the US economy, released tonight (our time), while others will be looking for signs of China’s demand for commodities waning in Rio’s and Fortescue’s quarterly reports. Remember to ignore the noise and focus on the long term view, Fools!.

If you’re in the market for some high yielding ASX shares, look no further than our ”Secure Your Future with 3 Rock-Solid Dividend Stocks” report. In this free report, we’ve put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

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Motley Fool writer/analyst Mike King doesn’t own shares in any companies mentioned.  The Motley Fool ‘s purpose is to help the world invest, better.  Take Stock  is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  Click here now  to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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