Explore the world.

Assess underlying market conditions and fundamentals in the world's major economies.

World

Stay ahead.

Follow the biggest stories in markets and economics in real time.

A
U
D

Sigh of relief

• Inflation focus. Strength in core inflation across Europe raised some concerns, but the US PCE deflator matched analyst predictions.• FX swings. There was a modest burst of intra-day FX vol overnight. The USD recouped its post PCE dip with month-end rebalancing a factor.• AUD & JPY. On net, AUD is little changed. Yesterday’s ‘hawkish’ BoJ rhetoric could be positive factor. A lower USD/JPY normally translates to a higher AUD. Inflation was in focus overnight with European country level readings and the US PCE deflator (the US Fed’s preferred gauge) released. The results generated a bit of intra-session volatility across...

Read More Read More

Antipodean FX underperformance

• Negative vibes. A slightly more bearish tone ahead of tonight’s US PCE deflator data. Equities & bond yields a bit lower. AUD & NZD underperform.• RBNZ holds. RBNZ clipped the markets hawkish wings. Rates held steady & odds of another hike were watered down. NZD fell. This dragged on the AUD.• AU CPI. Headline inflation failed to re-accelerate in January. But there was little new info on services prices. AU retail sales released today. A slightly more bearish tone across markets overnight as traders gear up for the release of the US PCE deflator (the US Fed’s preferred inflation...

Read More Read More

Cross-Check: AUD/NZD – Bouncing back

After falling away sharply over the past few weeks AUD/NZD looks to be bouncing back to life. A key catalyst behind the drop in AUD/NZD to multi-quarter lows recently was the NZD supportive upward repricing in NZ interest rate expectations as markets factored in a chance the normally cavalier RBNZ re-starts its hiking cycle. In the end, at today’s meeting, the RBNZ clipped the markets ‘hawkish’ wings. The RBNZ’s Official Cash Rate was held steady at 5.5%, and the underlying tone and updated forecasts watered down the prospect of further tightening this cycle. The implied odds of another rate rise...

Read More Read More

Will the RBNZ re-start is hiking cycle?

• Low vol. US/European equities consolidated, while bond yields nudged up. FX markets were well contained. AUD range traded over the past 24hrs.• RBNZ decision. RBNZ meets today. Markets are assigning a ~21% chance they hike rates. No change could see the NZD fall & AUD/NZD snap back.• AU CPI. January reading of the monthly CPI indicator due today. Annual inflation forecast to re-accelerate. This may catch the eye & give the AUD a boost. Another uneventful session overnight. US and European equities consolidated (S&P500 +0.1%), with yesterday’s lift in Asia not flowing through (China’s CSI300 index rose 1.2%, its...

Read More Read More

Rate markets continue to adjust

• Yields rise. Near-term rate cut bets continue to be trimmed back. This pushed up European & US bond yields, with EUR a little firmer.• Low vol. Outside of bonds, volatility across other major asset markets is below average. Japanese inflation, Fed speakers & US data in focus today.• AUD softer. Lower base metal prices have exerted a bit of pressure on the AUD. But correlations between the AUD & iron ore aren’t what they used to be. The subdued market performance has continued with relatively modest moves across most asset classes at the start of the week. As our...

Read More Read More