US CPI to Set Stage for the Fed
AUD
The Aussie dollar had a mixed performance against the majors yesterday, with commodities performing in a similar manner. Silver was up 0.3%, Gold flat, Iron Ore down 0.6% and Copper up 2.3%. Asian equities were mixed into the close, with the ASX down -0.4% and the Shanghai Comp up 0.2%. Yesterday, we had New Loans data out of China, coming in lower at 738B from a previous 2310B, with forecasts at 660B. Despite the data reading higher than expected, it does show a significant decline in Chinese loans, which are closely linked with economic stimulus, which has strong flow on effects to the Aussie economy’s health. Today at 11:30am we'll see NAB Business Confidence data.
USD
After trading flat throughout yesterday, AUDUSD lifted overnight to open this morning at 0.6375. Wallstreet was soft into the close, with the Dow Jones up 0.2%, S&P 500 up 0.1% and the NASDAQ down 0.1%. Looking to the news, FOMC Member Cook Spoke last night, not making any comments on monetary policy in her remarks. Early this morning we had the Federal Budget Balance which came in higher at -66.6B, with expectations at -70.5B from a previous -171B. It is a busy night for the US, with inflation data being released. Core CPI m/m is looking to remain unchanged at 0.3%, CPI m/m is expected to decrease from 0.4% to 0.1% and CPI y/y is also expected to decrease, from 3.7% to 3.3%. The sizeable decrease in the headline figure is largely attributed to reduced energy prices (mostly petroleum-based products), while the stubborn Core metric is what's seen fueling market expectations of the Fed to keep rates 'higher for longer' until the middle of next year.
EUR
The AUDEUR pair posted marginal gains over the past 24h to open at 0.5959. The European equities were able to close up in the green, with the DAX up 0.7% and the CAC up 0.6%. It was a quiet day out of the Eurozone yesterday, with no news being released. Tonight, we have Flash Employment Change q/q and Flash GDP q/q being released, looking to remain unchanged at 0.2% and -0.1% respectively.
GBP
The AUDGBP continues the weekly trend downward, breaching the 0.52 barrier early this morning, opening at 0.5192. The UK equities were strong into the close, with the FTSE up 0.9%. Looking to the news, Rightmove HPI m/m released yesterday, reading lower at -1.7% from a 0.5% and the CB Leading Index m/m was released higher at -0.4% from a -0.7%. Tonight, we have the Claimant Count Change, expected to decrease form 20.4k to 15k and Average Earnings Index 3m/y also expecting a decrease from 8.1% to 7.4%. Tonight’s data will show how rate hikes are impacting the labour market, and whether there is sufficient constriction in the upstream causes of inflation.
NZD
The AUDNZD sees a large gain over the past 24 hours, with the pair being quite stable during business hours, with the rally starting early into the night into this morning’s open of 1.0848. There was no news released yesterday, and there is no news to be released today; with FPI m/m being tentatively released at sometime during this week, previously coming in at -0.4%.