With the Nasdaq extending its losing streak to six trading sessions on Friday, the ASX enters the new week with a negative lead to contend with before tomorrow rate hike. 

Economic Calendar and News

This week economic calendar is headlined by the latest Reserve Bank of Australia meeting, with the central bank tipped to increase rates for the fifth consecutive month tomorrow.

Observers are expecting another 50 basis point hike, which would take the official cash rate from 1.85% to 2.35%. Pressure has only grown over the last week or so after the US central bank indicated it still has plenty of will to hike rates aggressively in order to quash inflation, even if it means some collateral damage for the economy. 

The bond market has started to reprice this outlook very recently, with bond futures suggesting Australia terminal cash rate could be just shy of 4% by the middle of next year.

In keeping with the RBA theme, governor Philip Lowe will deliver a speech this Thursday on Inflation and the Monetary Policy Framework, which could turn into a momentous occasion in defining the central bank commitment to stamp out elevated inflation.This week also sees a deluge of important economic data, including job advertisements, business inventories, the current account, the Balance of Trade, and GDP data.

Forecasts for growth during the second quarter vary widely, albeit the consensus figure points to GDP growth of about 1.1% for the June quarter, and 3.5% on an annual basis.

Overseas, US investors will be digesting last week jobs data, with the US unemployment rate unexpectedly rising to a six-month high of 3.7%. Although more than 300,000 jobs were added to the US economy in August, workforce participation hit its highest level since the pandemic began.Fed Chair Jerome Powell is also scheduled to speak this week, and the question everyone will be asking is what sort of tone he provides around interest rates. Investors may have a better understanding on whether another 75 basis point hike is in the works, or if a 50 basis point hike is being considered.The Fed is not alone among international banks on watch this week, as the European Central Bank also convenes for its latest interest rate decision. Economists believe the bloc may be on the verge of passing a record 75 basis point rate hike, with inflation showing no signs of slowing in August, surpassing 9%.

Stocks on watch

The global energy crisis is facing a new hurdle following events over the weekend that saw Russia Gazprom announce gas supply through the Nord Stream 1 pipeline to Germany would not restart as had been planned. 

Although it has since begun shipping natural gas to Europe via Ukraine, a shortfall is still in effect. The company has not provided any indicative date as to when the pipeline may resume operating, with a leak cited as the current hurdle preventing the pipeline from delivering critical gas supplies to Europe. 

The move continues the ongoing tit-for-tat between Europe and Russia, with EU nations keen to reduce their imports of Russian gas, but said nations have been dependent on supplies ahead of what is expected to be a bitter winter. Over recent days the G7 has also indicated it intends to place a price cap on oil exports out of Russia.

Some of the energy stocks that could see an increase in trading volumes include Beach Energy (ASX: BPT), Santos (ASX: STO), Woodside Energy Group (ASX: WDS), Cheniere Energy (NYSE: LNG), and TotalEnergies (NYSE: TTE), among others.

Australia big banks will no doubt be a talking point over the coming days amid an expected rate hike by the RBA tomorrow. Each of the banks have been citing margin pressure as a pressing concern in a fiercely competitive home loan market, but they have also mentioned rate hikes are expected to flow through as a tailwind over time. 

If the RBA does hike rates by 50 basis points, as forecast, attention will quickly turn to the likes of Commonwealth Bank (ASX: CBA), ANZ (ASX: ANZ), NAB (ASX: NAB), and Westpac (ASX: WBC) to see how much of the hike they pass on to borrowers, and depositors as well.The iron ore majors will remain a talking point this week with iron ore prices now below US$100 per tonne for the last few days. Selling pressure has weighed on the likes of BHP (ASX: BHP), Rio Tinto (ASX: RIO), and Fortescue Metals Group (ASX: FMG) in light of concerns about China economic growth, and recent dividend declarations have also crunched share prices, with FMG the latest to trade ex-dividend, today, which is very likely to lead to another dip in its shares.