Aussie Inflation Shows Significant Easing

AUD

The Aussie dollar had a mixed performance yesterday against the majors, with commodities having a similar performance, with Gold down 0.3%, Silver down 0.2%, Iron Ore down 0.4% but Copper up 0.8%. Asian Equities where red into the close, with the ASX down 0.7% and Shanghai Comp down 0.5%. Yesterday we had CPI y/y released locally, coming in at 4.3% which was lower than expectations of 4.4%, and substantially down from a previous 4.9%. This data is show that there is a strong trend downward in the inflation in Australia, even with increased retail sales that where recorded last month. Odds of an RBA interest rate hike next month are dwindling, although there is one more important quarterly CPI data point due before the decision. Today, we have Goods Trade Balance being released, expected to increase from 7.13B to 7.50B.

USD

The AUDUSD finds minor gains, with the pair ranging higher over the past 24 hours, opening this morning at 0.6699. Wallstreet saw consistent gains, with the Dow Jones up 0.5%, S&P 500 up 0.6% and the NASDAQ up 0.9%. It was a quiet night for the US news, with Final Wholesale Inventories m/m coming in as expected at -0.2%, inline with the previous reading. Tonight, we have a large part of the US’s inflation data being released. Core CPI m/m expected to remain unchanged at 0.3%, CPI m/m expected to increase from 0.1% to 0.2% and CPI y/y expected to also increase, from 3.1% to 3.2%. These readings are not the Fed’s preferred method of gauging inflation, but will give a strong indication on how inflation is tracking in this high interest rate environment.

EUR

The AUDEUR falls lower this morning, with the pair having a strong gains in the morning, consolidating during the afternoon before a hard drop overnight to this morning’s open of 0.6102. The European Equities where soft into the close, with both the DAX and CAC both closing flat. To the data, and there was French Industrial Production m/m, which came in higher at 0.5%, with expectations at 0.1% from a previous -0.3%. Italian Retail Sales m/m also came out higher at 0.4% from the expected 0.2%, with the previous reading being 0.4%. Tonight, it is quiet on the data front, with Italian Industrial Production m/m being released, expected to remain unchanged at -0.2%.

GBP

The AUDGBP opens flat against yesterday’s open, with the pair having a light rally during working hours before losing all the gains overnight to open back flat at 0.5257. British Equities where red into the close, with the FTSE closing down -0.4%. Last night we had BOE Gov Bailey Speaking last night on the Financial Stability Report in London. He stressed the importance of returning UK inflation to target and mentioned how unemployment hasn’t seen a jump and household incomes have risen in recent months; leaving a crack in the door for another potential hike. There is no data being released until Friday’s GDP m/m data release, expected to increase from -0.3 to 0.2%.

NZD

The AUDNZD opens higher this morning, with a strong rally over the past 24 hours, making this morning’s open nearly 0.5% higher at 1.0766. Yesterday at 11am we had ANZ Commodity Prices m/m come in higher at 2.4% from a previous -1.2%. This morning we had Building Consents m/m coming in lower at -10.6%, previously in at 8.7%; there is no further data to be released this week.