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The AUDUSD charted a spinning top yesterday. This is a candle of uncertainty. Bulls tried to take price up and bears tried to take price down. Neither was successful, with AUDUSD closing fairly flat on the day.
UK headline inflation dropped to 10.1% with a 4% drop in petrol and diesel prices in January. The core inflation rate decreased below 6%. The continuous disinflation trend in goods categories due to improving supply chains and lower consumer demand is linked to the decline in core inflation.
The real yield is in its hawkish channel, between the upper blue and red bands (top chart). The core CPI printed at 0.4% m/m, higher than the previous 0.3% m/m. This is 4.9% annualised, much higher than the previous 3.66%. The Fed still has work to do to bring core inflation down towards its target of 2% average.
Watch today’s US Open for commentary on the just released US CPI inflation data and the reaction of EUR/USD and NAS100, insights on Disney’s recent quarterly results and more
The pair made a strong start to the week and trades mixed after the UK employment report, as markets brace for CPI inflation updates from the US today and the UK tomorrow
A surprise announcement on Friday saw Japanese Prime Minister Kishida appoint Kazuo Ueda as the new BoJ governor. Ueda is a hawk relative to Mosayoshi Amamiya, the current deputy governor. However, his current leaning will probably have a dovish tilt with monetary policy shifting slowly.
The European Commission upgraded its 2023 growth forecast, but the pair is little changed, as markets brace for the latest CPI inflation data from the US on Tuesday
The markets have likely been running on the blowout non-farm employment change (NFP) released on 3rd Feb (orange dashed vertical), over any Fed communication. This suggests a heavy reliance on data and tomorrow we get the CPI at 1:30 pm GMT.
Watch today’s US Open for commentary on the blockbuster US jobs report, the recent central banks blitz and the impact on EUR/USD, NAS100 and other asserts
FXCM’s USDOLLAR is correlated with the real US 10-year yield, with a correlation coefficient of 78% (bottom chart). The real rate is adjusted for inflation and represents the true cost of borrowing. It helps participants make better informed decisions.
The central bank of Australia delivered another 0.25% rate increase, after the recent surge in inflation, pointing to more tightening in the upcoming months
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