It was Australia’s inflation data this week that raises expectations for a more aggressive RBA. All the inflation metrics beat across the board and both the trimmed mean and weighted median printed above market’s maximum expectations. See here for the prints from Financial Source’s calendar: The headline figure for Q4 2022 rose to 7.8% from … Read more
The way the market will react to this data point is most likely to be as follows. A strong inflation reading that comes in above 7% for the headline and above 6 % for the core will show market participants that the Fed still has more to do in terms of hiking rates
Inflation dogs the RBNZ as they seek to bring inflation down to 2%
On Thursday the Bank of England meet and a 50bps rate hike is fully priced in. A 75bps rate hike is seen by Short Term Interest Rate markets as having a 80% chance. The key aspect of this meeting is going to be what the BoE signal about the growth outlook and what happens to … Read more
The Bank of Japan have a problem. That problem is the weakness in the JPY. You can see from the index chart below that JPY weakness has been pronounced this year. The JPY being weak is great for Japan’s export economy. A weak domestic currency means that the countries exports are better value abroad. However, … Read more
The Fed are widely expected to hike interest rates by 75bps this Wednesday. Short Term Interest Rate markets are seeing it as a 100% probability and the same markets have a 79% chance of a larger 100bps hike. The expectations for larger hikes have increased after last Tuesday’s US CPI print where the headline and … Read more
Gold and silver markets have both been pressured over the last few weeks on expectations of aggressive Fed hikes. On Tuesday this week both headline and core inflation printed at the high end of expectations. The reaction in the market was predictable and offered good opportunities to astute traders. Stocks, bonds, precious metals all sold … Read more
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