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No major reports? No problem! Today Asian session forex traders turned their attention to New Zealand’s new government and the next Fed Chairman.

  • Australia’s CPI clocks in at 0.6% vs. 0.8% expected, 0.2% in Q2 2017
  • Australia’s CPI (y/y) up by 1.8% vs. 2.0% expected, 1.9% previous
  • Australia’s trimmed mean CPI up by 0.4% vs. 0.5% expected and previous

Major Events/Reports:

Australia’s CPI miss

The biggest story of the hour is Australia’s latest inflation numbers missing market estimates.

Consumer prices in the Land Down Under grew by 1.8% from a year earlier in Q3 2017, which is weaker than both the expected (2.0%) and Q2’s (1.9%) readings.

On a quarterly basis, prices grew by 0.6%, which is faster than Q2’s 0.2% growth but below the 0.8% expected figure.

A closer look tells us that there’s little inflation pressure outside of housing, energy, or health. Significant price increases were seen in electricity, tobacco, international holiday travel and accommodation, and new dwelling purchase, while significant price falls were seen in vegetables, automotive fuel, and telecommunication services.

Even RBA’s Trimmed Mean CPI maintained its 1.8% growth and missed expectations of a 2.0% gain, while the RBA’s Weighted Mean CPI gained by 1.9% in the three months to September after growing by 1.8% last quarter. Like the trimmed mean figure, though, it also missed the 2.0% expected mark.

Overall, the numbers point to more headaches for the RBA, which is already worried that rising household debt is outpacing real wages growth and is constraining growth in household spending.

If you recall, the central bank currently expect wages to remain low “for a while yet,” while it expects inflation to remain low but will “pick up gradually as the economy strengthens.”

Major Market Mover(s):

AUD

The surprisingly weak CPI report took its toll on the Aussie and inspired the biggest moves during the session.

AUD/USD is down by 62 pips (-0.80%) to .7718;
AUD/JPY is down by 64 pips (-0.72%) to 87.93;
AUD/NZD is down by 61 pips (-0.54%) to 1.1212, and
EUR/AUD is up by 116 pips (+0.77%) to 1.5231.

Watch Out For:

  • 6:00 am GMT: UBS consumption indicator
  • 8:00 am GMT: Credit Suisse economic expectations
  • 8:00 am GMT: German IfO business climate (115.0 expected, 115.2 previous)
  • 8:00 am GMT: German IfO current conditions (123.5 expected, 123.6 previous)
  • 8:30 am GMT: U.K. preliminary GDP to remain at 0.3% in Q3 2017?
  • 8:30 am GMT: High Street lending (41.8K expected and previous)
  • 8:30 am GMT: U.K. services index (0.4% expected, 0.5% previous)