Sticky Inflation Figures Back Further RBA Hike
AUD
The Australian Dollar opens higher against the majors this morning following hotter than expected inflation figures yesterday. Aussie CPIy/y came in at 3.8% (Est. +3.7%), while Trimmed Mean CPI m/m came in at +0.3% m/m raising speculation of a further rate hike. Asian equites ended the session higher, the Nikkei +2.2%, the Hang Seng and Shenzhen both +0.6% each. Locally the ASX 200 climbed +1.2%, with gains across technology and consumer staples sectors at +5.9% and +5.7%. Australia’s Capex numbers are due today and this survey is not as closely watched as it was during the heights of the mining investment boom Q4. The February edition however is the most important of the quarterly surveys as it includes the first survey of capex intentions for the following financial year.
USD
The AUDUSD coupling opens higher this morning at 0.7125 after yesterday’s inflation data showed Australian consumer prices rose by more than expected in January, while core inflation hit the highest in over a year strengthening the AUD. Also out of the US yesterday was a marathon State of the Union address where President Trump declared “The US we’re winning so much,” declaring he had sparked a jobs and manufacturing boom at home while imposing a new world order abroad. US equities closed in the green with the Nasdaq trading +1.1%, the S&P 500 +0.7%, and the Dow Jones +0.6%. Looking at US releases overnight we will see Unemployment Claims which is forecasted to increase from 206K to 217K. Iran and the US will hold a third round of nuclear talks tomorrow (local time) in Geneva, amid growing tensions about the risk of military conflict.
EUR
AUDEUR opens higher this morning at 0.6030. Eurozone equities closed in the green with the DAX +0.8%, and the CAC +0.5%. Some minor data out of the Eurozone yesterday with German GfK Consumer Climate coming through lower than forecast at -24.7. Looking at news out of the Eurozone today, ECB President Lagarde will be due to testify later this evening at 7:30pm before the Committee on Economic and Monetary Affairs of the European Parliament, in Brussels.
GBP
AUDGBP opens higher this morning at 0.5252 as the Aussie Dollar strengthens across the board, alongside Andrew Baileys comments discussing with lawmakers the Bank's decision to hold at 3.75% earlier this month, while hinting at what might come next. He told the Committee he will be going into the coming meeting "asking if a cut is justified". UK equities closed in the green with the FTSE +1.2%. It will be a quiet day out of the UK today with only MPC Member Lombardelli Speaking later this evening.
NZD
AUDNZD opens higher this morning at 1.1863 following suit with the other majors. Nothing of note out of New Zealand yesterday and will be another quiet day today with only ANZ Business Confidence set for release at with no further NZD data to close off the week.