Tariff-Driven Uptick Expected in U.S. CPI

AUD

AUD is mixed against the majors, with a largely muted response to Trump's tariff threats, with markets focusing on tonight's consumer inflation data from the U.S. Locally, the ASX shed -0.1% yesterday, with industrials and consumer discretionary sectors leading losses at -0.6% and -0.5%. A mixed day for Asian equities saw the Hang Seng up +0.3%, the Shenzhen +0.1% and the Nikkei -0.3%. Overall, commodities fell, other than a 1% gain for cotton. The AUD starts the week quiet, other than Westpac Consumer Sentiment out today. Thursday's employment data will be the big focus point. A big data day ahead for China, with GDP q/y, Industrial Production y/y, Retail Sales y/y, the Unemployment Rate and NBS Press Conference all taking place.
 

USD

AUDUSD opens slightly down at 0.6542, as the USD gained as traders look to US inflation data and overall dismiss new tariff updates. A relatively calm session on Wall St. saw minor gains with the Nasdaq closing +0.3%, while the Dow Jones and the S&P 500 both closed +0.2%. There was no data yesterday from the US though three big days of data starting today, with Core CPI m/m and CPI m/m both expected at 0.3% from previous 0.1%, which the Fed will be watching closely for further rate decisions with the lingering presence of universal tariffs. Markets will closely monitor tonight's data to assess whether Trump's tariffs are starting to filter through to what consumers pay, even as inflation data has so far remained more resilient than expected. Tomorrow evening, we'll see producer inflation (PPI) and Retail Sales.
 

EUR

AUDEUR follows suit, opening slightly down at 0.5608, as the EU warns the US of a potential stop in trade if 30% tariffs do go ahead. Euro equities closed down with the DAX -0.4% and the CAC -0.3%. A quiet Monday for the Eurozone for data, though today will see German ZEW Economic Sentiment forecasted at 50.8, ZEW Economic Sentiment at 37.8 and Industrial Production m/m at 1.1% from previous -2.4%. All data points are leading indicators of economic health within the EU. Overall, despite the data, the markets will be waiting to hear of the European Union's push back on the US after accusing them of resisting to strike a trade deal.
 

GBP

AUDGBP opens flat at 0.4873 following Bank of England's Governor Bailey stating uncertainty continues to weigh on growth expectations. The FTSE closed up 0.6%. Monday and Tuesday are mostly quiet for the GBP, though Wednesday has CPI, Core CPI, RPI and HPI.
 

NZD

AUDNZD opens up at 1.0959, with both currencies in the same boat following tariff threats and soured risk sentiment. No data out today. Tomorrow, the RBNZ Statement of Intent is released which provides insights into the bank's strategic priorities for the next financial year.