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- The AUD / USD is up three tenths of a cent on a consumer price index higher than 0.5% q / q, beating by 0.4% expected and before t / t.
- The CPI at 1.8% a / yr was also a forecast 1.7% y / y but lower than the previous 1.9% y / y.
- However, the adjusted average was online with before and planned at 0.4% q / q 1.8% y / y.
- That was an incredible number, well below the target range of the RBA and, instead, eyes are turning to the Fed, key data in the US and, in addition, the Sino / US . high level Trade talks in Washington tonight.
The AUD / USD bid on the data, but the result will not change anything at the start of the February RBA meeting nor should it change their medium-term outlook as long as global commodity markets will not be so promising anymore. and Chinese economy. On the contrary, given the recent announcement of NAB that it will raise its standard variable rate for homeowners repaying principal and interest by 0.12 percentage points, to 5.36% this Thursday, just a few months after Common Bank, Westpac and ANZ have imposed bike rises, the bar could be slightly lowered for a reduction in the RBA which would weigh on the AUD / USD – (the markets are already forecasting about -18 basis points at the end of 2019). However, for the moment, the Australian is a candidate, the general consensus being in favor of a lower result, especially if we consider that the third quarter is, seasonally, a more inflationary quarter.
However, it should be noted that the RBA has shown great patience with inflation below the target of 2-3%. Analysts in Westpac reminded us that the RBA is based on "the decline in the unemployment rate and the nascent recovery of wage growth", – Westpac. By rethinking the latest job numbers, they have once again strengthened the strength of the market. The seasonally adjusted data showed that the change in employment came to 21.6k compared to the expected 18.0k, but away from the previous 39.0k which had been revised upward from 37.0k. The unemployment rate fell to 5.0%, which is very positive, lower than the 5.1% forecast and the previous 5.1%. Full-time employment gained ground, -3.0K over previous -7.3K, revised from -6.4K and the change in part-time employment announced also promising, 24.6K compared to + 46.3K, revised + 43.4K. And above all, the participation rate is sold at 65.6%, slightly lower than the previous one and forecast at 65.7%).
Meanwhile, NAB's trading conditions of yesterday have been shocking. they arrived at 2 against 11 before. However, the long-term average is slightly less than 6, but remains quite far from the result to give a negative result. The RBA should be highly concerned about these data because of its correlation with commercial activity.
Look forward:
Given the tight correlation between currency and risk appetite, this week's Sino-US trade talks, the Fed, US data and sagas ongoing throughout Europe (Italy , slowdown in Germany, national challenges for Macron in France, Brexit in the UK global economic uncertainties in general, markets will be nervous about the direction that all this is taking.
AUD / JPY will probably be a thorn in the bull too. If the dollar erases on the horizon by the Fed, this could bring some relief in commodities, but China's growth is real and will continue to weigh on the Australian dollar.
AUD / USD Levels
- Support levels: 0.7125 0.7085 0.7030
- Resistance levels: 0.7175 0.7200 0.7235
Valeria Bednarik, Chief badyst at FXStreet, explained that parity had lost the positive momentum observed in early January, reaching 0.7235, but that the rebound of the 38.2% retracement of the rally mentioned last week limited the potential for the decline:
"The 4-hour chart shows that the pair is moving around convergent and directionless moving averages that clearly reflect the lack of directional force." The Momentum indicator in the chart mentioned is heading south around its midline, while that the RSI is around 50, The Inflation Report may not have an impact on the RBA's upcoming decision, but will likely offer short-term measures, with a break below the support of 0.7125 mentioned because the bad news opened the door to a faster fall to 0.7030. "
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