Today: Aus CPI Could Move AUD

AUD

The Aussie opens relatively flat against majors this morning, the Asian equities also closed mixed with the ASX up 0.3%, Shanghai Comp down -1.8% and Nikkei up by +0.1%. Yesterday, we had the Aussie Retail Sales m/m fall short of expectations; printing at -2.7% from expectations at -1.9%. We also had the CB Leading Index m/m from China, come in at -0.3% from the previous level at -0.5%, which had no significant impact on the market. All eyes are now on today’s CPI q/q, expected to print at 0.8%, the CPI y/y expected to print at 3.7% & the Trimmed Mean CPI q/q expected to print at 0.9%. The CPI release will be key ahead of next week's RBA interest rate decision (the first meeting of 2024), where the central bank is expected to hold interest rates at 4.35%, given CPI is moving in the right direction. At 12:30 today, we have major data from China being the Manufacturing PMI expected to print at 49.3 from a previous of 49.0, and the Non-Manufacturing PMI expected to print at 50.6 from a previous of 50.4 speculators also mentioned that “Manufacturing activity has been shrinking for most of the past year, underscoring the wider economy's lackluster recovery from the pandemic and doubts over its trajectory”.
 

USD

The AUDUSD opens flat today at 0.6602 recovering some of its losses in the late-night session. Wall Street closed mixed with the Dow Jones closing up 0.4%, S&P 500 closing flat, and Nasdaq closing -0.7%. We saw a quiet day for the US yesterday, however today we saw the S&P/CS Composite -20 HPI y/y print short of expectations at 5.4% from expectations at 5.8%, analysts also mentioned ““November’s year-over-year gain saw the largest growth in U.S. home prices in 2023, with our National Composite rising 5.1% and the 10-city index rising 6.2%”. We also saw the CB Consumer Confidence print in the green at 114.8 from expectations at 114.2 Economist Dana Peterson stated that “January’s increase in consumer confidence likely reflected slower inflation, anticipation of lower interest rates ahead, and generally favorable employment conditions as companies continue to hoard labor”. Following this we had JOLTS Job Openings print in the green at 9.03M from a previous of 8.93M. All eyes are on tomorrow’s US Federal Funds Rate decision (expected to hold at 5.5%) and the FOMC Statement / Press Conference in the early hours.
 

EUR

The AUDEUR opens in a tad lower at 0.6087. European Equities closed in the green with the DAX up by 0.2% and CAC up 0.5%. Yesterday, we had a flurry of lower tier data from the Eurozone, the Spanish Flash CPI y/y printed at 3.4%, the Italian prelim GDP q/q printed at 0.2%, the French Flash GDP q/q printed at 0.0% (higher than expectations, meaning the Eurozone has avoided entering a 'technical recession') and the German Prelim GDP q/q printed at -0.3% all printing in the green. ECB Nagel spoke earlier today where he mentioned that German Economic outlook isn’t great although inflation is absolutely moving in the right direction. Today, we have German Prelim CPI m/m which is expected at 0.1%. We are also going to see the German Import Prices m/m and German Retail Sales.

GBP

The AUDGBP opens relatively flat at 0.5198 with the FTSE closing the night session in the green up by 0.4%. Yesterday we had the BRC Shop Price Index y/y print at 2.9%, previously 4.3%, the M4 Money Supply m/m print in the green at 0.5%, mortgage approvals in the red at 50k from a previous of 49k, and the Net Lending to Individuals m/m print short at 0.4B. The CEO of the BRC stated “Retailers have spent the last eight months working to bring down inflation, but progress will likely be hampered by new cost pressures coming direct from government”. Quiet day ahead for the Pound with the only piece of data being the Nationwide HPI m/m expected to print at 0.1% later today from a previous of 0.0%. All eyes are on tomorrow with the BOE Monetary Policy Report, Monetary Policy Summary, MPC Official Bank Rate Votes and the Official Bank Rate from the pound. Analysts mentioned that “With inflation falling faster than the November BOE’s monetary policy report forecasted, a shift in inflation projections is likely to show UK CPI dropping to the 2% target a year earlier than expected”.
 

NZD

The AUDNZD opens in the red at 1.0763, losing gains it made earlier in the week. A quiet day for the Kiwi yesterday. Today, we have the ANZ Business Confidence to print in the late morning session with a previous figure of 33. Following this we also have a quiet week ahead for the Kiwi with the only other piece of data to come being the Building Consents m/m on Friday.