- Westpac is forecasting a +50bp RBNZ rate hike in February
- Australian CPI data & the RBA cash rate - "no option but to increase" the forecast
- Preview of the Bank of Canada monetary policy meeting Wednesday, 25 January 2023
- ANZ says Australian CPI data 'cementing' in 25bp rate hike at the RBA February 7 meeting
- RBNZ's own CPI indicator 5.8% y/y (prior 5.6%) - this is its Sectoral Factor Model
- The RBA website has outdated data on it, big time!
- There was a second CPI data point from Australia, came in at a rocketing 8.1% (from 7.3%)
- AUD/USD jumps on the higher than expected Australian CPI report
- Australia Q4 Headline CPI 1.9% q/q (expected 1.6%)
- ICYMI - China’s diesel exports rebound easing global shortage
- New Zealand analysts says "The world war on inflation is being won." RBNZ peak rate lower.
- Australian data - Westpac Leading Index for December -0.13% (prior -0.16%)
- “Soft landing” is the new “transitory inflation” - "markets look vulnerable”
- ANZ New Zealand revise forecasts for RBNZ rate hikes ahead - lower terminal rate seen
- ICYMI - ECB's Simkus says Bank should continue with +50bp interest rate hikes
- Forexlive Americas FX news wrap: USD has another whippy day
- NZ Q4 CPI higher than expected. Later today the RBNZ releases its own CPI data, stay tuned
- New Zealand Q4 inflation 1.4% q/q (expected 1.3%) 7.2% y/y (expected 7.1%)
- Oil - private survey of inventory shows much larger build than was expected
- Goldman Sachs says Bank of Canada to hike by 25bps on Wednesday, upside USD/CAD risk
- Trade ideas thread - Wednesday, 25 January 2023
In Asia on Tuesday markets remained closed in China and Hong Kong. On Thursday (tomorrow) China and Australia will be out on holiday.
The focus for the session was on New Zealand, and then Australian, CPI data for Q4 2022. There is detail on these reports and market and analyst responses in the bullets above. Both sets of data came in higher than expected. Some comfort in the NZ data was in a slowing rate of non-tradeable inflation, and indeed some market analysts trimmed their terminal rate forecasts largely on this. NZD/USD slid a little lower on the session but as I update is back to the middle area of its range.
The Australian CPI rose strongly, with the headline and both measures of core (underlying) inflation well higher than consensus expectations. The key ‘trimmed mean’ measure of core inflation came in at 6.9% y/y, far above the most recent Reserve Bank of Australia forecast for it at 6.5%. Responses were almost uniform in acknowledging a +25bp rate hike at the February 7 meeting is now locked in. Some analysts had been tipping an ‘on hold’ February decision but have since changed the call to +25 based on the incoming data. Not all though. Market pricing firmed for a +25bp move.
In addition to the Q4 CPI the Australian Bureau of Statistics also published December-month CPI (i.e. CPI for that month alone, not for the quarter). This rocketed to 8.1% y/y.
AUD/USD has risen on the session, back above 0.7100.
Elsewhere across major FX we’ve had limited moves only. EUR/USD is up a few tics, as it USD/JPY. EUR/JPY is up with these moves.