Australia: Lack of price pressures – Westpac

Sandeep Kanihama FXStreet Contributor

Australia’s annual pace of the average of the core measures in Q2 was 1.8%yr, flat on the 1.8%yr in Q1, and up from 1.5%yr in Q4 and Q3, notes the analysis team at Westpac.

Key Quotes

“A significant observation was the lack of price pressure in major retail sectors, particularly clothing & footwear which typically sees a rise in Q2 but in this instance fell 0.3%.”

“Housing is crucial to core inflation. The 0.3% rise for this component had an interesting composition, with dwelling purchases gaining 0.9% due to out sized gains in Sydney and Brisbane, but rental inflation remaining subdued in aggregate as falling rents in Perth and Brisbane offset moderate growth in Sydney and Melbourne.”

“Our preliminary estimate for Q3 2017 is a 0.8%qtr rise in the headline CPI, 2.0%yr. Of the increase in the headline CPI, 0.4ppts comes from an 11% increase in utility bills. Food should also bounce with a strong seasonal rise in fresh fruit & vegetables. Our estimate for core inflation is soft at 0.3%qtr/1.8%yr.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold hangs near one-week low; looks to FOMC Minutes for fresh impetus

Gold is consolidating just above the $4,850 level, having touched a one-week low on Tuesday, amid mixed cues. Signs of progress in US–Iran talks dent demand for the traditional safe-haven bullion. Meanwhile, rising bets for more Fed rate cuts keep the US Dollar bulls on the defensive and act as a tailwind for the non-yielding yellow metal. Traders also seem reluctant ahead of the FOMC Minutes, which would offer cues about the Fed's rate-cut path and provide some meaningful impetus.

DeFi could lift crypto market from current bear phase: Bitwise

Bitwise Chief Investment Officer Matt Hougan hinted that the decentralized finance sector could lead the crypto market out of the current bear phase, citing Aave Labs’ latest community proposal as a potential signal of good things to come.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.