Global Markets

The Australian central bank opted again for a miniscule rate hike, despite recent inflation surge and higher 2022 projection

The week FXCM market specialists Russ and Nik discuss the u-turn in PM Liz Truss's policies. Inflation remains rampant and sticky, with core CPI surprising to the upside. The terminal rate jumps to 5%, with the following two meetings for 2022 expected to hike at 75bps each. USDJPY reaches 32 years high, as central bank policies diverge. Please listen in for the above and more.

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.

In this week's podcast, FXCM Senior Market Specialists Russ and Nik discuss the fallout from the UK's mini-budget. The two specialists also talk about jobs data and how that impacts the Fed's monetary policy in its battle to tame inflation. In addition, the environment increases in complexity with the Q3 earnings season kicking off this week. Join our specialists as they discuss these and more.

The central bank of New Zealand maintained its hawkish stance and delivered another 50 basis points interest rates hike today, just a day after its Australian counterpart slowed its pace

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

Last week's minibudget caused vast amounts of volatility in the Gilt market, with GBPUSD reacting. Finally, the BoE stepped in to calm markets. Since then, UK Chancellor Kwasi Kwarteng has backtracked on 45% tax rate cut. The core PCE in the US surprised to the upside at 4.9%, suggesting sticky inflation. This Friday, we will see the NFP numbers, with forecasts ranging between 250-265k, suggesting moderation in job numbers.

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