Welcome to our daily market update where we help keep you informed on the latest happenings in the world of FX and show you what this means for the Mighty Aussie Dollar.
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Key Data Being Released Today
Japan – PPI (+8.2% YoY Expected)
US – CPI (7.2% YoY Expected)
Macro Report
Major currencies were firmer against the US dollar in European and US trade. The Aussie dollar rose from near US71.45 cents to US71.93 cents and was near US71.80 cents in afternoon US trade. The Euro rose from lows near US$1.1402 to near US$1.1447 and was near US$1.1425 in afternoon US trade.
The sell-off in Treasury’s eased and equity markets rallied overnight. US 10-year yields fell by 1 point to near 1.95%. Both European and US equity markets saw solid gains admits earning season, continuing recent gains.
The pull back in US yields and risk-on sentiment in equity markets saw the DXY slipping, the AUD being one of the main beneficiaries.
Ahead of tonight’s US CPI release, Atlanta Fed president Raphael Bostic said in an interview with CNBC on Wednesday that “There is some evidence we are on the cusp” of inflation that begins to ease perhaps by midyear”. Markets are anticipating headline consumer price index to have increased more than 7% annualised when figures are released overnight, with close attention on the month-on-month pace of change to gauge signs of difficulties working their way through the supply chain. With the Fed signalling upcoming rate hikes, tonight’s CPI may sway markets around their expectation around how increases there will be this year.
Maersk’s CEO, heading up the world’s largest container shipping company responsible for almost a fifth of the world seaborne container traffic, said she expects supply chain bottlenecks to only last until June and gradually ease thereafter, aided by reduced demand for goods as people return to work and spend more of services like travel and entertainment.
Ahead, In Australia weekly payrolls jobs & wages data is released with business turnover. In China, money and credit data may be issued. The big release is In the US, the consumer price index. The consensus looking for 0.5%/7.3%, another solid monthly and higher annual read after 0.5%/7.0% for December. Core CPI is also expected to have grown 0.5% m/m, annual growth pushing up to 5.9% from 5.5%. Weekly jobless claims also due (consensus 230k vs 238k last week).
AUD/USD Daily Chart
DXY (USD INDEX) Daily
Major Global Markets
| Currencies | Level | Change (%) |
| AUD/USD | 0.7182 | 0.49 |
| AUD/JPY | 82.975 | 0.49 |
| AUD/CNH | 4.5686 | 0.41 |
| DXY | 95.5510 | -0.10 |
| Rates | Yield (%) | Change (%) |
| US 10 Year | 1.943 | -0.02 |
| Aus 10 year | 2.13 | 0.01 |
| Equities | Level | Change (%) |
| S&P 500 | 4587 | 1.45 |
| NASDAQ | 15057 | 2.10 |
| ASX 200 | 7268 | 1.14 |
| Commodities | Level | Change (%) |
| Iron Ore | 137.5 | 1.44 |
| Gold | 1833.05 | 0.38 |
| Brent Crude oil | 91.8 | 1.12 |