Australian CPI jumps, as do RBA rate hike bets and the Australian dollar. Read from the bottom up for the chronology:
- RBA rate hike incoming on November 7 - will they hike again in December?
- Commonwealth Bank of Australia forecast a 25bp RBA rate hike on November 7
- Australia - Demand for luxury supercars "through the roof"
- Australian Treasurer Chalmers says inflation is moderating but persistent
- ANZ forecasts a 25bp RBA interest rate hike on November 7 (previous forecast was December)
- Australia - market is rapidly pricing in a November rate hike after surging inflation data
- AUD/USD jumped higher on Australian inflation data, November 7 rate hike is likely now.
- Australian Q3 2023 Headline CPI +1.2% q/q (vs. 1.1% expected)
Other:
- European Central Bank President Lagarde is speaking Wednesday (Powell too!)
- Hong Kong to cut home purchase tax by 50%
- China vice fin min says govmt debt level is within a reasonable range
- WSJ's Fed insider Timiraos says most think FOMC has made its last rate increase
- PBOC sets USD/ CNY reference rate for today at 7.1785 (vs. estimate at 7.3213)
- Japan PM Kishida refrained from talking down USDJPY Tuesday, will he today? Rate near 150
- Reserve Bank of Australia Governor Bullock will be appearing in parliament after CPI data
- China's Xi visited the People's Bank of China and FX regulator
- Blackrock spot BTC ETF ticker has reappeared on the DTCC list
- ICYMI - China will issue an additional 1 trillion yuan ($137 bn) in treasury bonds in Q4
- The Bank of Japan's own inflation measure has hit 2%. This is the BOJ target.
- US media say 24 US military personnel wounded in drone attacks in Iraq & Syria last week
- JPMorgan CEO Dimon said central banks got forecasts “100% dead wrong”
- Oil - private survey of inventory shows a large headline draw vs. small build expected
- Visa touts a resilient consumer
- Forexlive Americas FX news wrap: US dollar reasserts itself
- Major indices close higher. NASDAQ up for the 2nd consecutive day.S&P snaps five-day slide
- Trade ideas thread - Wednesday, 25 October 2023
Q3 inflation data from Australia was the focus going into the session. The data showed stronger than expected CPI growth, the q/q for each of the three main measures came in above Q2 and higher than expectations (see bullets above). While y/y rates fell the key is the q/q rising so strongly. In addition, inflation is still sitting above the Reserve Bank of Australia's forecasts. New RBA Gov. Bullock has expressed more hawkishness than previous Gov. Low and said less than 24 hours ago that the RBA will hike again if there is a material upward revision to its inflation forecasts. Stir in a still strong employment market, with unemployment not too far from 50-year lows and the result is very, very likely to be a rate hike from the Bank at its next meeting, on November 7. When I say ‘very, very likely', you can read that as ‘lock it in’. I expect a 25bp rate hike.
As I post two (ANZ & CBA) of the ‘big four’ Australian banks have already revised their forecasts to tip a November rate hike. One of the others (NAB) was already forecasting this. I’m sure Westpac will be the same but I haven't seen a note just yet.
AUD/USD jumped after the release of the data, hitting a high of circa 0.6400. Its dribbled back to under 0.6385 as I post. NZD/USD followed a similar pattern. Movement across major FX rates otherwise has been dull.
There is not a lot of movement to report on oil or gold. BTC jumped early in the session but has sat around $34K since.
Chinese stocks gained, helped by stimulus announcements earlier this week. Hong Kong reduced its home-buying tax, helping further.
Asian equity markets:
Japan’s Nikkei 225 +1.3%
China’s Shanghai Composite +0.5%
Hong Kong’s Hang Seng +1.5%
South Korea’s KOSPI -0.5%
Australia’s S&P/ASX 200 -0.02%
