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AUSTRALIAN DOLLAR, CPI, INFLATION, WAR RBA
- Australian Dollar Down After Second Quarter CPI underestimates expectations at 2.1% y / y
- Declining Bond Returns Local 19659003] Trade wars are now focused on Trump meets Junker, the WTO weighs on the United States and China
See our free guide to learn how to use economic news in your trading strategy on the 39, AUD / USD
! The Australian dollar depreciated against its US counterpart, falling alongside local bond yields, as CPI data put inflation at a lower rate than expected by economists. The overall year-over-year price growth rate was 2.1% in the second quarter, underestimated at 2.2%. The markets' response to the result suggests that it has probably cooled speculation about rising RBA interest rates.
Markets had already rejected the likelihood of a rate hike in 2018 before the release of the CPI. Indeed, the estimated bets suggest an increase that will arrive at the earliest in July 2019. The probability of such a result has gone from 57.8% to 52.2 after the CPI data has passed. lines, which implies a slight adjustment of the basic outlook. In fact, the probability of a rate hike at all scheduled RBA meetings between today and the end of next year has slightly decreased.
In any case, the fallout of the trade war between the United States and China The calculation of RBA between now and when a rate increase could appear. China is Australia's largest trading partner. If trade tensions are detrimental to growth, the negative effects on Australian performance could further delay rate hikes or completely change the cautious tightening bias of the central bank
. President Donald Trump and the President of the European Commission, Jean-Claude Junker, as well as the WTO General Council meeting for a temperature control on the developments of the world trade war. The former will offer an opinion on Trump's willingness to enter into a deal while the latter will treat permanent spitting between the United States and China.
