Aus Core Inflation Hits 3.5-Year Low

AUD

AUD opens mixed against the majors after a quite 24 hours in terms of economic data. Following a volatile start to the week, the capital markets are quieter and the ceasefire between Israel and Iran appears to be holding. Asian equities continued higher on Wednesday, the Shenzhen +1.4%, the Hang Seng +1.2% and the Nikkei +0.4%. Yesterday's CPI report showed Australian consumer inflation slowed more than expected in May (2.1% y/y, expected at 2.3%, previously 2.4%) while the closely watched trimmed mean core measure eased to three-and-a-half-year lows of 2.4%, strengthening the case for another RBA rate cut next month. Futures markets are now pricing in 95% odds of a 25bps cut from the RBA in July, up from 80% odds before the inflation data was released. The next major Aussie data release will be Retail Sales m/m next Wednesday.
 

USD

General USD weakness helped AUDUSD to a high of 0.6519 overnight before settling at 0.6508, then climbing to 0.6521 currently. A relatively calm session on Wall St. saw the Nasdaq close +0.3%, the S&P 500 -0.1%, and the Dow Jones -0.3%. Overnight, Federal Reserve Chair Powell testified before a senate committee and indicated the US central bank is still struggling to determine the impact of tariffs on consumer prices. Later today we have the GDP q/q, Unemployment Claims and Durable Goods Orders releasing. The highlight of the week will be tomorrow night when the Core PCE Price Index is set to be released.
 

EUR

AUDEUR hit 0.5600 high late last night, it then fell off and traded sideways in the early hours to open today slightly down at 0.5584. European equities closed lower with the DAX down -0.6% and the CAC -0.8%. European Central Bank President Lagarde is due to speak tonight. Overall, a quiet week for Euro data.
 

GBP

AUDGBP hit highs of 0.4776 overnight before falling off to a rate of 0.4764. The FTSE saw a small drop closing at -0.5%. No UK data last night. Governor Bailey is set to speak at the British Chambers of Commerce Global Annual Conference later tonight. No major data or news expected in the near future until Governor Bailey is set to participate in a policy panel at the ECB Forum on Central Banking next Tuesday.
 

NZD

AUDNZD opens slightly down at 1.0774. The New Zealand Dollar edged higher on Wednesday as a truce in the Middle East seemed to be largely holding for the moment. We may see the release of the RBNZ Statement of Intent tomorrow - Providing insight into the central bank's priorities for the next financial year.