US CPI to Affirm Fed Pause?
AUD
The Aussie dollar lost some ground yesterday, opening slightly lower against the majors, while commodities saw mixed results with Gold up 0.2%, Silver up 0.4%, Iron Ore down 0.5% and Copper down 1.2%. Asian Equities saw light gains yesterday, with the ASX closing up 0.1% and Shanghai Comp up 0.7%. There was no data released yesterday, with RBA Gov Bullock speaking this morning, giving insight into the RBA's efforts to modernise Australia's payment system.
USD
The AUDUSD opens slightly lower, with the pair falling yesterday morning then sitting in a tight range for the remainder of the day through to this morning’s open of 0.6562. Mild gains were seen on Wall Street with Dow and S&P 500 both up 0.3% and Nasdaq up 0.1%. There was no data released out of the US last night, with tonight being the major release of consumer inflation. Core CPI m/m is expected to increase from 0.2% to 0.3%, CPI m/m is expected to remain unchanged at 0.0% and CPI y/y expected to slightly decline from 3.2% to 3.1%. This data will be crucial for the US Fed, as their commentary is widely expected to push back against the recent dovish market narrative (markets currently pricing in 125 bps of cuts from the Fed next year, beginning in March/April). The data will also be critical ahead of the Fed's interest rate decision in Thursday's early hours (expected to hold at 5.5%).
EUR
The AUDEUR opens slightly lower this morning, with the pair shifting lower yesterday and working mostly back overnight to this morning’s open of 0.6102. The European equities saw slight gains on Monday, with the DAX up 0.2% and CAC up 0.3%. There was no news released yesterday, with today being a quiet one as well, with ZEW Economic Sentiment being released, expected to slightly decrease from 13.8 to 13.3.
GBP
The AUDGBP opens slightly lower today, after a hard fall during yesterday’s trading hours, with a mild retracement overnight to this morning’s opening of 0.5220. The British Equities were soft into the close, with the FTSE down 0.1%. It was a quiet day for news yesterday, with only the Rightmove HPI m/m released, coming in lower at -1.9% form a -1.7%. Tonight, we have Claimant Count Change, expected to increase from 17.8k to 20.3k. Average Earnings Index 3m/y is also being released, expected to decrease from 7.9% to 7.7%. The tightening economic conditions in this high interest rate environment seem to be negatively affecting the labour market, and if these data pieces come in as expected it should put a downward pressure on the UK’s sticky inflation.
NZD
The AUDNZD grinds lower yesterday, after an unremarkable trading day, opening at 1.0728. There was no data released yesterday, but this morning we had Visitor Arrivals m/m come in at -8.0%, previously at 2.4%. There are no other data releases for the rest of the day.