NZD

• Weaker USD. Lower than expected US CPI was compounded by soft PPI inflation. US bond yields have fallen back further. The USD has weakened.• Risk sentiment. The shift in interest rate expectations has boosted risk appetite. Equities & commodities higher. The AUD has jumped up.• Too far too fast? Markets have moved a long way very quickly. Inflation is heading in the right direction, but central banks may not declare victory just yet. The adjustment in markets following the lower-than-expected US CPI data (released two nights ago) has continued with softer producer price inflation reinforcing the ‘disinflation’ theme. Equities...

• Mixed markets. US yields & the USD Index lower. But AUD underperforms as concerns about China’s economic trajectory remain in place.• China deflation risks. China CPI/PPI inflation underwhelmed, another sign the post-COVID recovery is faltering. Measures are needed to reinvigorate demand.• US inflation. US CPI (released Weds night AEST) is a focal point. Base-effects point to a further step down in inflation. This could exert more pressure on the USD. A relatively quiet start to the new week across markets. Overnight, European and US equities posted modest gains (S&P500 +0.2%), oil prices gave back some ground (WTI crude -0.9%),...

• US payrolls. Non-farm payrolls came in lower than expected. But other detail in the report shows that the US labour market is still tight.• Softer USD. The USD weakened. US CPI in focus this week. Base-effects point to a further step down in inflation. This could exert more pressure on the USD.• AUD rebound. AUD has bounced back. In addition to the US CPI, RBA Governor Lowe speaks on Wednesday. We think the AUD may recover more ground. A tumultuous week for markets was brought to a close by the release of the US labour market report on Friday....