Markets Look to Chinese Inflation Print

AUD

The Aussie dollar opens down across all major currencies, while the ASX closed 0.3% higher yesterday on the back of 1.9% gains in IT and 1.2% gains in Real Estate. Asian equities closed the day in the red as South Korea lost 0.9%, Hong Kong -0.6% and Japan -0.3%. No major data yesterday following Tuesday's RBA interest rate hike to 4.35%, with another quiet day ahead on the domestic calendar. To China, today we'll see the CPI y/y (expectations of -0.1%) and PPI y/y (expectations of -2.7%), reflecting the unfolding manufacturing slump & property crisis. Investors continue to wait for Beijing to roll out further stimulus measures, but so far, the policy response has been underwhelming. We also have the RBA Monetary Policy Statement tomorrow at 11:30am, where markets will be keenly gauging the RBA's willingness to potentially raise rates beyond Tuesday’s decision.

USD

AUDUSD reached 0.6444 highs overnight before falling to open today at 0.6402. Wall Street closed off yesterday slightly lower with Nasdaq finishing at 0.1%, S&P 500 closing flat and the Dow Jones closing at -0.2%. Yesterday, we had the Treasury Currency Report where the US Treasury reiterated its call for greater transparency in how Beijing conducts its exchange-rate policy and said it was monitoring China alongside five other major trading partners over its currency practices. Early in the morning today, we had Fed Chair Powell speak at the Division of Research and Statistics Centennial Conference, where he said the central bank must be willing to think beyond the complex mathematical simulations it traditionally uses to forecast the economy. Tonight, we'll see US Unemployment Claims expected at 218k for the past week (previous figure 217k).

EUR

AUDEUR has given up nearly 1% overnight to open today at 0.5976, while European equities showed some strength with CAC and DAX gaining 0.7% and 0.5% respectively. No other major pieces of data for the EUR yesterday apart from scattered data including German Final CPI m/m, French Trade Balance and Italian Retails sales which all came in slightly lower than expectations. No major data again today apart from the ECB Economic Bulletin and ECOFIN Meetings during the late-night session with no expectations on moving the market. In tomorrow's early hours, ECB President Lagarde will speak at the inauguration of the House of Euro which may show some movement in the market against the Aussie.

GBP

AUDGBP has also given up nearly 1% overnight, opening this morning at 0.5211 while the FTSE closed -0.3% in yesterday's session. Last night, we had BOE Governor Bailey speak at the Central Bank of Ireland Financial System Conference in Dublin, where he described the benefits of openness and the risks posed by fragmentation for the world economy and financial stability which showed slight movement against the Aussie. No major data today with all eyes on the GDP m/m tomorrow, expected to stay flat at 0.0% with previous levels at 0.2%.

NZD

AUDNZD opens in the red at 1.0829, furthering the steady decline since last Thursday’s 4-month highs of 1.0943. Yesterday, we had the Inflation Expectations q/q which came in at 2.76% (previously 2.83%). A quiet few days ahead for the Kiwi dollar, with the only piece of data being the BusinessNZ Manufacturing Index tomorrow which is not expected to impact the market.