Olivia

Europe European markets have seen another choppy and negative session after today’s US CPI report for June came in at sizzling hot 9.1%. The bigger than expected jump in inflation has raised the volume on the ever-growing drumbeat of recession, which is starting to make itself heard on a more audible basis. As has been the case globally, the surge was driven by higher food and energy prices, with US gasoline prices up almost 60% year on year. Today’s sell-off has been across the board with all sectors getting hit, with the best performers coming from commercial real estate as British Land and Land Securities claw back some of their losses from yesterday. The losses have been broad based, with IAG down after posting some decent gains yesterday, while the miners are also lower on weaker copper prices and rising global recession risks The Platinum Jubilee didn’t provide the pubs sector the boost that was originally envisaged if today’s Q4 numbers from JD Wetherspoon are any guide, with the shares slipping to their lowest levels since March 2020, after like for like sales fell by -0.4% over the same period as 2019. Despite getting permission to stay open longer over… Read More »Hot US CPI and monster rate hike from the Bank of Canada unsettles markets

Australia is expected to have added 25K new jobs in June, below the previous 60.6K. Overheating inflation is still the main theme and the catalyst for risk-off movements. AUD/USD is under pressure and has major chances of a bearish breakout. Australia will report June employment data on Thursday, July 14. The country is expected to have added a modest 25K new jobs after gaining 60.6K in the previous month, while the Unemployment Rate is foreseen down to 3.8% from 3.9% in May. Ahead of the figures, Australia will also unveil July Consumer Inflation Expectations, with analysts expecting it at 5.9%, down from 6.7% previously. Employment and inflation As usual, the report will not include wage growth, which is released quarterly in the country around five weeks after the quarter ends. The latest Wage Price Index was the Q1 2022, which rose by 0.7% QoQ and 2.4% YoY, the highest annual rate recorded since December 2018, although still below the comfort RBA’s level at around 3%. Job creation and wage growth have been overshadowed by lingering inflation, not only in Australia. Generally speaking, central bankers’ function is to keep inflation in check at levels between 2% and 3%. So far, policymakers… Read More »Australian Employment Preview: Could it save the aussie?

AUD/USD Current Price: 0.6767 Australia will release the June employment report early on Thursday. The American dollar swung alongside the market’s sentiment after US CPI figures. AUD/USD has limited bullish potential in the near term, needs to clear 0.6810. The AUD/USD pair advanced for a second consecutive day, now trading around the 0.6760 level. The intraday direction depended on the greenback, which appreciated amid a bout of risk-aversion. The dismal mood was triggered by US inflation figures, as the headline Consumer Price Index reading soared by 9.1% YoY in June, a new 40-year high. Equities plunged with the numbers, weighing on the pair, later bouncing alongside Wall Street. Australia published July Westpac Consumer Confidence, which improved in July to -3% from -4.5% in the previous month. The country will report June employment data in the upcoming Asian session and is expected to have added a modest 25K new jobs after gaining 60.6K in the previous month, while the Unemployment Rate is foreseen down to 3.8% from 3.9% in May. Ahead of the figures, Australia will also unveil July Consumer Inflation Expectations, with analysts expecting it at 5.9%, down from 6.7% previously. AUD/USD short-term technical outlook From a technical point of… Read More »AUD/USD Forecast: Aussie extends gains ahead of Australian employment data

AUD/USD Current Price: 0.6767 Australia will release the June employment report early on Thursday. The American dollar swung alongside the market’s sentiment after US CPI figures. AUD/USD has limited bullish potential in the near term, needs to clear 0.6810. The AUD/USD pair advanced for a second consecutive day, now trading around the 0.6760 level. The intraday direction depended on the greenback, which appreciated amid a bout of risk-aversion. The dismal mood was triggered by US inflation figures, as the headline Consumer Price Index reading soared by 9.1% YoY in June, a new 40-year high. Equities plunged with the numbers, weighing on the pair, later bouncing alongside Wall Street. Australia published July Westpac Consumer Confidence, which improved in July to -3% from -4.5% in the previous month. The country will report June employment data in the upcoming Asian session and is expected to have added a modest 25K new jobs after gaining 60.6K in the previous month, while the Unemployment Rate is foreseen down to 3.8% from 3.9% in May. Ahead of the figures, Australia will also unveil July Consumer Inflation Expectations, with analysts expecting it at 5.9%, down from 6.7% previously. AUD/USD short-term technical outlook From a technical point of… Read More »AUD/USD Forecast: Aussie extends gains ahead of Australian employment data

Annual CPI in the US is forecast to rise to 8.8% in June. Markets are not sure about the size of the Fed's September rate hike. Core inflation is set to edge lower on falling crude oil prices.  The relentless US dollar rally extends further ahead of the highly-anticipated inflation data from the US. The US Dollar Index (DXY), which tracks the greenback’s performance against a basket of six major currencies, is already up more than 3% in July amid growing fears of the global economy tipping into recession. The US Bureau of Labor Statistics is expected to report that the Consumer Price Index (CPI) rose to a fresh multi-decade high of 8.8% on a yearly basis in June from 8.6% in May. The Core CPI, which excludes volatile food and energy prices, is forecast to decline to 5.8% from 6%. Crude oil prices fell sharply in June, suggesting that it wouldn’t be surprising to see a retreat in core inflation. After having posted gains for six straight months, the barrel of West Texas Intermediate (WTI) lost more than 8% in June. US annual CPI chart Market implications The US dollar remains the go-to safe-haven asset as the US Federal… Read More »US June CPI Preview: Dollar rally could lose steam on soft inflation data

Annual CPI in the US is forecast to rise to 8.8% in June. Markets are not sure about the size of the Fed's September rate hike. Core inflation is set to edge lower on falling crude oil prices.  The relentless US dollar rally extends further ahead of the highly-anticipated inflation data from the US. The US Dollar Index (DXY), which tracks the greenback’s performance against a basket of six major currencies, is already up more than 3% in July amid growing fears of the global economy tipping into recession. The US Bureau of Labor Statistics is expected to report that the Consumer Price Index (CPI) rose to a fresh multi-decade high of 8.8% on a yearly basis in June from 8.6% in May. The Core CPI, which excludes volatile food and energy prices, is forecast to decline to 5.8% from 6%. Crude oil prices fell sharply in June, suggesting that it wouldn’t be surprising to see a retreat in core inflation. After having posted gains for six straight months, the barrel of West Texas Intermediate (WTI) lost more than 8% in June. US annual CPI chart Market implications The US dollar remains the go-to safe-haven asset as the US Federal… Read More »US June CPI Preview: Dollar rally could lose steam on soft inflation data

Annual CPI in the US is forecast to rise to 8.8% in June. Markets are not sure about the size of the Fed's September rate hike. Core inflation is set to edge lower on falling crude oil prices.  The relentless US dollar rally extends further ahead of the highly-anticipated inflation data from the US. The US Dollar Index (DXY), which tracks the greenback’s performance against a basket of six major currencies, is already up more than 3% in July amid growing fears of the global economy tipping into recession. The US Bureau of Labor Statistics is expected to report that the Consumer Price Index (CPI) rose to a fresh multi-decade high of 8.8% on a yearly basis in June from 8.6% in May. The Core CPI, which excludes volatile food and energy prices, is forecast to decline to 5.8% from 6%. Crude oil prices fell sharply in June, suggesting that it wouldn’t be surprising to see a retreat in core inflation. After having posted gains for six straight months, the barrel of West Texas Intermediate (WTI) lost more than 8% in June. US annual CPI chart Market implications The US dollar remains the go-to safe-haven asset as the US Federal… Read More »US June CPI Preview: Dollar rally could lose steam on soft inflation data

Annual CPI in the US is forecast to rise to 8.8% in June. Markets are not sure about the size of the Fed's September rate hike. Core inflation is set to edge lower on falling crude oil prices.  The relentless US dollar rally extends further ahead of the highly-anticipated inflation data from the US. The US Dollar Index (DXY), which tracks the greenback’s performance against a basket of six major currencies, is already up more than 3% in July amid growing fears of the global economy tipping into recession. The US Bureau of Labor Statistics is expected to report that the Consumer Price Index (CPI) rose to a fresh multi-decade high of 8.8% on a yearly basis in June from 8.6% in May. The Core CPI, which excludes volatile food and energy prices, is forecast to decline to 5.8% from 6%. Crude oil prices fell sharply in June, suggesting that it wouldn’t be surprising to see a retreat in core inflation. After having posted gains for six straight months, the barrel of West Texas Intermediate (WTI) lost more than 8% in June. US annual CPI chart Market implications The US dollar remains the go-to safe-haven asset as the US Federal… Read More »US June CPI Preview: Dollar rally could lose steam on soft inflation data

The Reserve Bank of New Zealand is seen raising OCR by 50 bps to 2.5% in July. Hard-landing risks unlikely to dissuade the RBNZ at this policy meeting. The kiwi could see a brief correction if the central bank sticks to its hawkish stance. The Reserve Bank of New Zealand (RBNZ) is on a hat-trick, as it is set to hike the key policy rate for the third meeting in a row this Wednesday. With increasing odds of a global recession, will the central bank hint at any slowdown in its pace of tightening? What would it mean for the NZD/USD pair? RBNZ forward guidance holds the key The RBNZ’s third consecutive 50 bps rate increase on Wednesday will lift the Official Cash Rate (OCR) from 2% to 2.5%. The central bank kicked off its tightening cycle in October 2021 and since then has resorted to super-sized rate hikes to fight raging inflation. The policy announcement will not be accompanied by any updated projections or be followed by Governor Adrian Orr’s press conference. A majority of the economists forecast the RBNZ raising rates by 50 basis points to 2.50% at its July 13 meeting while expecting the OCR to reach 3.50% or… Read More »Reserve Bank of New Zealand Preview: Hitting the repeat button despite hard-landing fears

The Reserve Bank of New Zealand is seen raising OCR by 50 bps to 2.5% in July. Hard-landing risks unlikely to dissuade the RBNZ at this policy meeting. The kiwi could see a brief correction if the central bank sticks to its hawkish stance. The Reserve Bank of New Zealand (RBNZ) is on a hat-trick, as it is set to hike the key policy rate for the third meeting in a row this Wednesday. With increasing odds of a global recession, will the central bank hint at any slowdown in its pace of tightening? What would it mean for the NZD/USD pair? RBNZ forward guidance holds the key The RBNZ’s third consecutive 50 bps rate increase on Wednesday will lift the Official Cash Rate (OCR) from 2% to 2.5%. The central bank kicked off its tightening cycle in October 2021 and since then has resorted to super-sized rate hikes to fight raging inflation. The policy announcement will not be accompanied by any updated projections or be followed by Governor Adrian Orr’s press conference. A majority of the economists forecast the RBNZ raising rates by 50 basis points to 2.50% at its July 13 meeting while expecting the OCR to reach 3.50% or… Read More »Reserve Bank of New Zealand Preview: Hitting the repeat button despite hard-landing fears