Partner Center Find a Broker

The Aussie took some hits during the Asian session after Australia’s headline CPI reports missed expectations. Details of the report, however, don’t bad enough to influence the RBA’s biases.

  • NZ visitor arrivals up by 1.5% in March vs. 1.9% decline in February
  • NZ credit card spending up by 0.8% in March vs. 1.4% decline in February
  • AU quarterly CPI steady at 0.5% vs. 0.6% expected
  • AU trimmed mean CPI also at 0.5% as expected vs. 0.4% uptick in Q4 2016

Major Events:

Australia’s CPI release – Consumer prices in the Land Down Under painted a mixed picture as it missed headline expectations but not enough to make a dent on the RBA’s plans.

On a quarterly basis, prices rose by 0.5% from Q4 2016, which is the same pace as the previous quarter but slightly below market expectations of a 0.6% growth.

The annualized figure fared a bit better, clocking in at 2.1% from a year earlier in March. This is not only much better than the 1.5% increase in Q4 2016, but it also marks the highest reading since Q2 2014. Wowza!

Meanwhile, the RBA’s trimmed mean CPI, which came in at 1.9% from a year earlier in Q1 2017 after rising by 1.6% in the previous quarter. Its quarterly reading clocked in at 0.5%, which is also better than Q4 2016’s 0.4% uptick.

Last but not the least is the RBA’s weighted mean CPI, which clocked in at 1.7% in the three months to 2017 from a year earlier. Much like the other CPI readings, it’s also better than Q4 2016’s 1.5% growth.

A closer look tells us that automotive fuel (+5.7%), new dwelling purchase by owner-occupiers (+1.0%), medical and hospital services (+1.6%) and electricity (+2.5%) all pulled prices higher in Q1 2016 while international holiday travel and accommodation (-3.8%), fruit (-6.7%) and furniture (-3.5%) dragged on the data.

Last week the RBA already hinted that it’s looking at the labour and housing markets closely for its next policy steps. So, while today’s releases might have caused short-term volatility in the Aussie, they’re also not expected to make a dent on the RBA’s latest game plan.

Market Movers:

AUD – Aussie traders weren’t impressed with today’s CPI headlines and they made it known by dragging the comdoll lower across the board.

AUD/USD is down by 21 pips (-0.28%) to .7515, AUD/JPY dropped by 16 pips (-0.19%) to 83.57, and EUR/AUD jumped by 40 pips (+0.28%) to 1.4552.

Watch Out For:

  • 5:45 am GMT: France’s INSEE consumer confidence expected to remain at 100
  • 6:00 am GMT: Switzerland’s UBS consumption indicator
  • 8:00 am GMT: Switzerland’s Credit Suisse economic expectations