Aussie Inflation Expected to Cool Today
AUD
The Aussie Dollar opens up higher against all the majors this morning, after what was a quiet day yesterday with no Aussie data releases. Asian equities followed suit as the Hang Seng pushed 4.1% higher followed by the Shenzhen’s 2.9%. The ASX gained 0.5% as Mining stocks rebounded from yesterday to put up 2.7%. Commodities saw Copper jump 1.7% while Iron Ore -0.1% and Silver and Gold both up 0.1%. On to the news, today we have our CPI q/q, CPI y/y, and Trimmed Mean CPI q/q set to be released later in the morning at 11:30, which will guide next week's next RBA cash rate decision with any upside surprises likely to see a strong market reaction. Currently markets are pricing a 50/50 chance of another interest rate hike on Tuesday. We also have some news out of China later this evening with the CB Leading Index m/m being released.
USD
The AUDUSD opens higher this morning trading at 0.6786, in spite of some strong data out the US overnight with HPI m/m, S&P/CS Composite-20 HPI y/y, and CB Consumer Confidence all coming through better than expected. Likewise Wall St. had another night of gains with the Nasdaq closing +0.7%, the S&P 500 +0.3% and the Dow Jones +.1%. Looking at tonight's data, New Home Sales, and Crude Oil Inventories are set to be released however focus will be on the The Fed's interest rate decision with the FOMC Statement and Federal Funds Rate set to be released at 4am. Futures markets are pricing a 95% probability of a 25bps rate hike tonight, so the gist of the Statement will likely be the market driver if the expected 25bps are delivered. If the Fed decides to leaves rate unchanged (which is unlikely), it's fair to expect significant USD weakness.
EUR
AUDEUR opens higher this morning after rallying last night, opening at 0.6142 this morning. Contributing to the rally was the release of the German ifo Business Climate, and the Belgian NBB Business Climate which both came through under forecast which added to an already weak EUR after Monday night's poor European PMIs. European equities on the other hand came in mixed with the DAX +0.1%, and the CAC -0.2%. A quiet day ahead for news releases out the Eurozone with only the M3 Money Supply y/y, and Private Loans y/y set to be released later this evening at 6pm, however in what is a busy week for central banks, tomorrow night the ECB will deliver their own interest rate decision.
GBP
The AUDGBP rallied early this morning opening higher at 0.5260, with only the CBI Industrial Order Expectations being released yesterday performing better than expected. On to equities we saw the FTSE come through at 0.2%. No news set to be released today. Focus is on the USA tonight with the interest rate likely to go higher again.
NZD
The AUDNZD saw a steady improvement, reclaiming its 1.09 handle this morning opening higher at 1.0915. It will be quiet for our Kiwi neighbours as no news set to be released this week.