Inflation

AUD pairs are broadly lower as inflation falls to 6.8% y/y (7.1% expected), bolstering expectations that the RBA will hold rates at their April meeting.

With the latest FOMC meeting in the rear-view mirror, Fed observers can now shift their focus to the Fed’s preferred inflation gauge (core PCE).

The GBP/JPY has been supported by a double dose of bullish factors this week.

Today’s UK inflation print could be the difference between a final 25bp hike from the BOE tomorrow, or a pause. Then our attention turns to the FOMC meeting.

The report printed in line with expectations at 6.0% y/y, the smallest annualized gain since September 2021

In the wake of the implosion of SVB, traders are dialing down their expectations for Fed hawkishness next week...

The Canadian GDP was much worse than expected, however the GDP Price Deflator was also weak.

The ECB had already planned a half-point rate move in March, and these stronger readings are likely to bolster officials who say that more big moves are needed beyond that to get inflation under control.

The US dollar has continued lower overnight following Powell’s dovish comments, with US inflation data having the potential to extend or reverse some of its move.

Based on the limited figures we have access to, there’s some evidence that the labor market has deteriorated over the last month...

Whilst Australia’s final inflation print for the year remains high by historical standards, it was much lower than expected at 6.9% y/y

This report will make the case that policymakers should find the wisdom to accept what they cannot change: inflation is not only secular, but it is also the medicine that the global economy needs to escape its debt trap and solve the generational inequalities which tear apart Western countries.

Inflation in Canada is still high despite the Bank of Canada “only” hiking 50bps at its last meeting, rather than the 75bps that the markets expected

Japan, long known for their lack of inflation, has just seen consumer prices rise to their highest levels since 1982.

In this week’s edition, we discuss the dollar, EUR/USD, gold and the Russell index.

The November preliminary reading of the Michigan Consumer Sentiment Index was 54.7 vs an expectation of 59.5 and an October reading of 59.9.

Traders were net-short the 2-year treasure note by a record amount last week. Which means falling yields are likely driven by short-covering by bears with sore heads.