Economies

Australian CPI Inflation climbed to the highest levels since 1990 in the third quarter of the year (y/y), helping AUD/USD extend Tuesday’s advance

Oil prices are subdued at the start of this week, unable to get a lift from Monday’s strong Q3 GDP from the world’s second largest consumer

After a tumultuous week and U-turns from the British government, the newly appointed finance minister, announced further changes to the fiscal plans

Yesterday's CPI print surprised to the upside. Headline CPI came in at 8.2% y/y against an expectation of 8.1% y/y. However, core CPI is up 6.6% from a year ago. This print matched the previous release and is the fastest rate of change since 1982.

The real rate uptrend remains valid, and the upward green trendline defines its momentum. In this vein, a pullback to test this momentum will be compelling, given the Fed's current aggressive monetary policy. As such, and until proven otherwise, a dip in the yield uptrend remains our preferred scenario.

Australia’s central bank raised interest rates again today, but the 0.25% move was smaller than expected and constituted a step back from the larger hikes in the previous four meeting

Core PCE, the Fed's preferred inflation measure, exceeded the 4.7% YoY forecast, printing at 4.9%. However, on a month-on-month basis, it was 0.6% against the 0.5% expected. Food and energy prices are excluded from the core number, implying that aggregate demand hasn't adjusted as expected for the Fed's current hiking cycle.

This month and especially the current week, have been intense in terms of central bank activity, with historic rate hikes to contain inflation, in spite of rising fears of recession

The Federal Reserve delivered another historic 75 basis points rate increase and upgraded its forecast, seeing rates as high as 4.4% by the end of the year

Germany’s Producer Price Index surged to the highest levels ever in August as today’s data showed, following recent elevated Consumer prices, in the aftermath of the ECBs aggressive rate hike

Last week's CPI numbers showed resilient inflation. This surprised markets and introduced 100bps as an option for the Fed. Join FXCM Market Specialists Russ and Nik as they discuss this, the new terminal rate, and the chances of the Fed overshooting. The two specialists also examine the yield inversion and discuss the BoJ's monetary policy. Please join us for these and more.