My Wednesday musings

Aussie Dollar settling post CPI

Today's numbers:

  • AUD CPI q/q +0.4% v 0.5% expected
  • AUD Trimmed Mean CPI q/q +0.5% v +0.5% expected

Overall, inflationary pressures on the economy aren't overbearing. This isn't going to effect the RBA's interest rate path in the near term.

In terms of the Aussie, at the moment we're more focused on the China/USD trade wars and a weaker Chinese yuan.

The up, down and settle in the middle reaction of the AUD/USD chart I'm going to go through (I get a few requests for this one on the comments and I assure you it's coming today, distracted or not!), will show this point well.

"Tariffs are the greatest"

Who do you think said this? There's really only one option that could come to mind, right? 2018...

Yep, this was US President Donald Trump proclaiming that "Tariffs are the greatest!" He is of course warning the world (a totally backward idea to what we're used to, I know) that he'll impose more sanctions unless they negotiate a fair deal. Fair being, US friendly and with their pull, they are able to do it.

This of course has HUGE implications for global markets and you can already see a slowdown in economic growth in global numbers, coming from all of this uncertainty.

It's certainly a shake up.

Euro positioning into ECB tomorrow

Eamonn has gone through what the major banks are expecting from the ECB tomorrow in his what to expect from the ECB meeting blog posted earlier today.

In what is expected to be a quiet one in terms of policy, traders will still no doubt be hanging off every word when it comes to the press conference. I'm quite looking forward to blogging it anyway.

It seems Draghi will probably dodge any specifics when it comes to the timing of the next hike, but with uncertainty remaining as to what the ECB actually meant by "through the summer" when last speaking about leaving rates on hold, there will no doubt be grilling around that going on.

Possibly juicy and I'll get to the charts soon.

The British PM takes control of Brexit negotiations

The Brexit department will no longer be responsible for negotiating Brexit, as the PM and her top official take charge of talks.

It's a "coup d'etat", the media is screaming! But for us, it is looking like possibly stabilising things a little more and Cable held onto its gains overnight as a result.

In this market, I'm thinking more that it didn't drop is a good sign. This Brexit process theme has been done to death and markets aren't going to move on every little back and forward we see playing out in political backrooms.

What are your thoughts on some of these themes?