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A new trading week begins, and one of the factors that continues to stand out is the neutrality of the Japanese yen. Japan’s currency has struggled to recover consistent short-term appeal, something reflected in USD/JPY price action, with the pair moving around 0.1% over the last two sessions near the reference area of 160 yen per dollar.
As we approach the middle of the month, the Mexican peso has so far managed to maintain solid strength at the start of the year. Currently, USD/MXN is posting a streak of three consecutive bearish sessions, with a decline of more than 0.6% in favor of the peso, in a context where the U.S. dollar has once again shown signs of indecision.
June quarter Australian inflation data has surged to 6.1%, but below consensus expectations easing fears of a supersized 75bp rate hike when the RBA meets next week.
Tucked in between this week's FOMC meeting, U.S Q2 GDP data, and earnings reports from U.S mega tech is the release of Australian Q2 inflation data
We have seen similar moves fade in this bear trend…
In a preview earlier this week, we noted that a firm Q1 Australian inflation print would likely confirm the end of the era of ultra-low interest rates in Australia and the possibility of an interest rate hike as early as next week.
This morning's release of March quarter Australian inflation data smashed already elevated expectations. The stunning beat firms up the chances that the RBA will raise interest rates at its monthly board meeting next week for the first time since 2010.
Tomorrow morning sees the release of March quarter Australian inflation data. It will likely be remembered as the final data point to confirm the end of an era of ultra-low interest rates in Australia and set the scene for an RBA interest rate hike as early as next month.
Overnight, inflation in the U.S. accelerated to 7.9% in February, the highest rate since January 1982
In a reversal of roles, Australian Q4 CPI data released earlier this week has proved to be a reliable predictor of inflation in New Zealand, as annual inflation in New Zealand accelerated to a 30 year high earlier today.
Australian inflation for Q4 surprised to the upside, continuing a trend seen across many major developed markets in recent months.
Evidence of nine Omicron cases discovered in the Nelson-Tasman region of New Zealand last week prompted a move from orange to red light traffic setting over the weekend, meaning new restrictions have come into force.
The rout in U.S. stock markets deepened last week on concerns over rising interest rates and heightened tensions between Russia and Ukraine. The broader U.S. share market has now fallen 8.3% from its high of early January, while the tech-heavy Nasdaq is down ~14% from its all-time high from November.
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