The focus during the time zone here today was on the Australian inflation data. We
The
focus during the time zone here today was on the Australian inflation
data. We only get official inflation data four times a year from
Australia (and New Zealand), and today’s was the info for Q2 of
2022. There is more detail in the bullets above but the summary is
that while the y/y showed solid rises the q/q results were mainly as
expected and are not running away to the topside. Markets were fearful that stronger than expected inflation
growth would prompt a more aggressive cash rate hike from the Reserve
Bank of Australia at their upcoming meeting next week (August 2,
statement due at 0430 GMT that day). The CPI today looks to have
locked in the long-expected 50bp rate hike and removed the likelihood of a +75bp rate hike.
Also
on the data agenda were improved Industrial Profits (for June) from
China as the country slowly recovers from coronavirus outbreaks and harsh restrictions.
Fresh
news flow was light. Reports are that US President Biden and China’s
President Xi will speak on Thursday. It appears any tariff
discussions will take a back seat to talks on Taiwan and Ukraine.
Of
course, all of this is a mere placeholder ahead of the big event due
Wednesday US time, the FOMC rate hike (1800 GMT) and associated press conference
from Chair Powell (1830 GMT). A +75bp decision is widely expected. Full preview
is here:
AUD/USD
lost some points after the CPI data, NZD/USD was dragged down a
little alongside. GBP, EUR, CAD are all a touch better bid against
the USD, albeit in not-large ranges. USD/JPY moved back above 137.
www.forexlive.com