Hot US CPI Dims Rate Cut Hopes

AUD

AUD opens weaker against most majors, minorly up on NZD with no major data out for today. The ASX 200 gained +0.6% yesterday with the industrials and financial sectors outperforming. Asian equities put up a strong performance on Wednesday, the Hang Seng the standout, up +2.6%, with the Shenzhen and Nikkei in tow, up +1.0% and +0.4% respectively. Overnight, we saw no major data come out. A quiet data day locally today, MI Inflation Expectations previously at +4%, out at 11am.
 

USD

AUDUSD falls from brief highs of 0.6324 and opens lower at 0.6278. A softer session on Wall Street, Dow Jones down 0.5% although small gains for the Nasdaq and the S&P 500 down 0.3% with US CPI data printing higher than forecasts. Overnight, we saw Core CPI m/m data come out above expectation (forecasted at 0.3%) at 0.4%. With U.S consumer prices increasing faster than expected, this has reinforced expectations the Federal Reserve will be in no rush to resume cutting interest rates. In today’s news, President Trump Spoke this morning about his latest executive orders at the White House and FOMC Member Waller Spoke this morning on important innovation for the crypto ecosystem with the potential to improve retail and cross-border payments. Tonight, we have PPI, giving a snapshot of producer price inflation in the US.
 

EUR

AUDEUR opens lower at 0.6045. European equities were steadier, the Dax up +0.5% while Cac up +0.2% at the closing bell. Deutsche Bundesbank President Nagel spoke overnight low impact but talked on the ECB approaching a neutral rate. A few low impact ECB Economic Bulletin and Industrial Production m/m data pieces expected to come out today. We will see Flash Employment Change q/q and Flash GDP q/q out tomorrow.
 

GBP

AUDGBP continues to fall from Tuesday's highs of 0.5090 and opens at 0.5046. The FTSE was up +0.3%. No UK data yesterday. The preliminary Q4 GDP print is due out today. Recent activity indicators as well as monthly GDP data indicate that momentum in the economy has weakened significantly since the first half of 2024. We''' also see the Goods Trades Balance, Industrial Production m/m and Manufacturing Production m/m.
 

NZD

AUDNZD opens flat on yesterday's open at 1.1125, having peaked at 1.1141 overnight. We didn’t see any major data out yesterday, however, NZ Inflation Expectations q/q will be released today at 1pm. In the last reading, expectations for one-year-ahead annual inflation decreased by 35 basis points from 2.40% to 2.05%. No other major data out.

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