Wall St Unphased by Sticky US Inflation
AUD
The AUD opens mixed with no local or Chinese figures released overnight or during yesterday’s intraday session. Yesterday morning, our RBA’s Hunter gave her first public speech since taking her assistant role at the RBA in January this year, commenting slightly hawkishly “for some households, interest rate hikes are also challenging and difficult, but inflation is the single biggest drag”, however with little market reaction. Aussie equities had a mixed day, with ASX +0.1%, Shanghai Comp -0.4% and Nikkei -0.1%. The commodities desk was also mixed, Crude Oil -0.2%, Natural Gas +0.2%, Gold and Silver flat, and Iron Ore -1.8%. Today we have a tentative release of Chinese New Loans, expected to decrease by 3.4T Yuan from last month. Overall, a very quiet week for the Aussie Dollar with the next major piece being China's Industrial Production m/m and Retail Sales, on Monday.
USD
The AUDUSD opens flat at 0.6606 despite higher inflation figures coming out of the US overnight. The pair reacted sharply to the news, briefly moving between 0.6585 and 0.6639. Core CPI m/m beat expectations by +0.1% to land at +0.4%, CPI y/y also beat expectations by +0.1% to land at +3.2%, and CPI m/m came in right on expectations at 0.4%. These figures added evidence of inflation proving sticky, likely keeping the FED wary of easing rates in the immediate future. The slightly stronger-than-expected inflation figures didn't slow Wall St., with the Dow printing +0.7%, S&P 500 +1.1% and Nasdaq +1.5%. Very quiet night ahead, but on Thursday night we’ll get insight into the employment, retail and wholesale sector with Core PPI m/m, Retail Sales m/m and Unemployment Claims.
EUR
The AUDEUR opens slightly lower at 0.6043 without much news out of the Eurozone. The pair traded between 0.6035 and 0.6067 off the back of the US inflation print. Last night, we saw Germany’s Final CPI m/m fall right on expectations at 0.4%, following previous data which showed their annual inflation rate easing in February to indicate a slowdown in rise of consumer prices. European equities had a green day with DAX printing +1.2% and the CAC +0.8%. Tonight, we’ll have German WPI m/m expected to print +0.1% higher to land on +0.2%, and Italy’s Quarterly Unemployment Rate also expected to improve slightly from last quarter at 7.3%.
GBP
The AUDGBP opens flat at 0.5154 after mixed employment figures printed last night. Claimant Count Change came in positive, with 4000 claims less than expected, to land at 16.8K total. However, the Unemployment Rate came in worse than expected, forecasted to print flat at 3.8% but came in at 3.9%. Labour wage numbers showed inflation to be decreasing, with Average Earnings Index 3m/y printing at 5.6% to an expected 5.7%. UK equities finished in the green despite this, with the FTSE up +1.0%. Tonight, we’ll have the GDP m/m released, expected to add +0.3% from last month to land at 0.2%.
NZD
The AUDNZD opens higher at 1.0744 following weaker food inflation figures from NZ this morning. Their FPI m/m (Food Price Inflation) was previously a strong 1.2%, but without any forecasts for this month, it came in at a much weaker -0.6%. Looking forward, we’ll have insight into their tourism economy, with Visitor Arrivals m/m on Thursday morning.