U.S and European equity markets along with AUD/USD pushed higher overnight thanks to a mostly flat U.S CPI figure. The benchmark CPI figure came in around expectations at 0.3% while core CPI (which excludes food and energy) came in around 0.1%. U.S inflation is running at around 1.5%-2% for the year. The CPI figures while not shooting the lights out do leave the door open to a rate hike before year end, but they also give the more bearish members of the Federal Reserve ammunition to oppose any rate hike before 2017 – and perhaps that’s why we’re seeing AUD/USD rally along with U.S equities.
Ahead today is Chinese GDP and Industrial Production figures with both looking to come in around the six and half percent mark. Important to add that while there’s been a lot of Chinese economy bashing over the past few years including calls that China’s headed for a very hard landing, both gauges appear to have bottomed out and perhaps may even be rising again when you look at a more macro chart. Note: don’t under estimate the Chinese economy and Chinese officials who have proved that they are willing to bolster and support growth whenever and wherever it’s required.
DATA RELEASES TODAY:
CNY – GDP and Industrial Production at 1.00pm
GBP – Average Earnings Index and Claimant Count Change at 7.30pm
USD – Building Permits at 11.30pm
AUD EXCHANGE RATES:
AUD/USD – 0.7650
AUD/GBP – 0.6217
AUD/EUR – 0.6966
AUD/NZD – 1.0638
AUD/JPY – 79.46
***Above rates are indicative wholesale rates and intended as a guide only***
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