Higher Interest Rates Reigning In Inflation
AUD
The Aussie Dollar has fallen against the majors in the past 24 hours, fuelled by yesterday's lower inflation data. Iron Ore and Copper have slowed their descents, down -0.3% and -0.2% respectively, adding to the AUD's woes. Asian equities were mixed on Wednesday with the Hang Seng +0.9% while the Nikkei fell 0.7% and the ASX closed 0.1% lower as the major miners trimmed losses earlier in the session. The main event yesterday was the trifecta of CPI data which show a larger-than-expected decline. Headline CPI y/y came in 0.2% lower than expected at 6.3% (down from 6.8%) and the Trimmed Mean CPI q/q was also 0.2% lower than forecasts, with 1.2%. The headline quarterly CPI came in at 1.4% higher than the 1.3% forecasted however this measure isn't adjusted for the most volatile goods in the CPI basket and is therefore usually overlooked in favour of the Trimmed measure. Overall the RBA will happy with the results which show a move in the right direction in the battle against the rising costs of living, and there is now only a remote chance of an interest rate hike at Tuesday's next RBA meeting. Only low tier data expected today in the form of Import Prices for the quarter.
USD
AUDUSD continues to slide lower, reaching a 6-week low in the early hours this morning, recovering only slightly to open at 0.6605. A lot of macro-economic data was released with mixed results last night in the US. The CB Consumer Confidence came in 2.8 lower then expected at 101.3, New Home Sales up 50k and Core Durable Goods Orders m/m was 0.3% higher than the forecasted -0.2%. Durable Goods Orders m/m are also up at 3.2%, much higher than the tipped 0.7%. Wall St was mixed in early trade with the Dow and S&P sliding into the red soon after the open, weighed by further concerns about the troubled regional lender First Republic. The NASDAQ remained firm however and held gains of 0.5% or more. Looking to tonight’s data, there is Advance GDP q/q which is forecasted to show growth of 2.0% and Unemployment Claims at 247k.
EUR
The AUDEUR has plummeted through the 0.6 barrier reaching lows not seen since October 2020, slightly recovering to 0.5983 at today's open. European Equities where down, with DAX losing 0.5% and the CAC down 0.9%. There was light data last night, with only the German GfK Consumer Climate coming out, slightly lower than the forecasted -28, with a -25.7. Looking forward the Spanish Unemployment Rate is tipped at 13% and Italian 10 year Bond Auction data will be released late this afternoon.
GBP
The AUDGBP opens at 0.5286, slightly higher than the fresh yearly low reached early this morning. The FTSE was down 0.5% from yesterday. It is a very light week in data for the GBP, one piece out last night, being the CBI Realised sales, coming in at 5, beating the forecasted 4. There is no data to come out tomorrow for the pound.
NZD
The AUDNZD is opening marginally higher at 1.080, with a slow descent over yesterday, and an equal recovery last night and into this morning. Credit Card Spending y/y data was released at 1pm yesterday, coming in at 20.3%, lower than the previous reading of 25.5%. Looking forward there is the ANZ Business Confidence is going to be released at 11am today, with no forecast, it is not expected to have a lot of weight to shift markets.