AUD: CPI slows as headline inflation misses forecasts – UOB Group

FXStreet Insights Team FXStreet

Headline CPI was flat on the month and slowed to 3.4% y/y, undershooting expectations as underlying inflation eased slightly. Despite the softer print, the November CPI is unlikely to influence the RBA’s February decision, with attention firmly on the quarterly inflation data later this month, UOB Group's economists Lee Sue Ann reports.

Softer monthly CPI unlikely to shift RBA outlook

"Headline CPI was flat m/m and slowed to 3.4% y/y, below expectations. Trimmed mean inflation also eased slightly, while seasonal CPI rose 0.2% m/m." 21

"Housing CPI rose 5.2% y/y, as electricity costs were up 19.7% y/y due to rebate rolling-off effects. Excluding rebates, electricity rates rose by a more modest 4.6%. Food and transport price inflation remained stable at around 3.3% and 2.7% respectively."

"The monthly CPI is still relatively new, and the softer Nov reading is unlikely to sway the RBA’s next meeting on 3 Feb. The quarterly inflation report on 28 Jan will matter more."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD breaks below 100-day SMA after hot US inflation data

The Australian Dollar weakens against the US Dollar on Thursday after encountering a key resistance confluence at the 50- and 200-day SMAs, while strong US data reaffirmed the economy’s strength, which could increase the chances of higher interest rates. The AUD/USD trades at 0.7020.

USD/JPY flatlines near 157.70 after hot Tokyo CPI as focus remains on BoJ

USD/JPY consolidates around 157.70 during the Asian session on Friday, moving little following the release of hot Tokyo CPI as focus remains on the highly anticipated BoJ rate decision. Meanwhile, upside remains capped as the US Dollar stays depressed amid the Euro's post-ECB rise. However, Thursday's US macro data reaffirmed Fed hike bets, which, along with geopolitical uncertainties, support the buck and the currency pair.

Gold falls to near $4,000 as US PCE data reinforces December Fed hike odds

Gold price falls to around $4,015 during the early Asian session on Friday. The precious metal loses ground as US inflation data reinforced expectations ‌of a Federal Reserve interest rate hike later this year.

Bank of Japan to leave interest rates steady at 1.25%

The Bank of Japan is set to announce its monetary policy decision on Friday at around 02:30 GMT. Like the Federal Reserve, financial markets are confident that the BoJ will leave interest rates unchanged, after raising them by 25 basis points to 1.25% in the September policy meeting. This is the highest interest rate level seen in 31 years in Japan.

Ethereum dips as US PCE inflation reinforces December rate hike

Ethereum fell below $2,300, down 4.8% on Thursday following a rise in US Personal Consumption Expenditure inflation. The PCE Price Index climbed 0.5% MoM and 3.6% YoY in September, matching market forecasts. Core PCE, which excludes volatile energy and food prices, increased by 0.3% monthly and 3.1% yearly, also in line with expectations.

A hot US economy is supposed to sink Gold. It didn't. Here's why

Gold (XAU/USD) remains under pressure near $4,000, as stronger-than-expected United States (US) economic data reinforce expectations of another Federal Reserve (Fed) interest rate hike in December. Economic growth is accelerating, inflation remains elevated, and borrowing costs could rise further.