A$ Little Changed As Weak Equities Offset Higher CPI

AUDUSD was trending higher before the higher-than-expected April CPI outcome following a low of 0.6639. The pair spiked to 0.6666 on the news but has now given up those gains and is around 0.6650 as equities across most of the region sell off. The USD index is up 0.1%.

• April CPI inflation came in higher-than-expected at 3.6% y/y after 3.5% in March. The underlying trimmed mean picked up to 4.1% from 4.0% (see MNI Disinflation Progress Stalls, Prolonged RBA Hold Likely). Inflation remains sticky and heading towards the RBA’s upwardly revised 3.8% forecast for Q2 keeping it on hold.
• Aussie is little changed against most of the major crosses. AUDNZD has seen one of the larger moves rising 0.1% to 1.0844 driven by Australian April CPI. AUDJPY is slightly higher at 104.60. AUDEUR is up 0.1% to 0.6129 and AUDGBP +0.1% to 0.5215.
• Equities are generally weaker with the ASX down 1.3% and the Hang Seng -1.5% but the CSI 300 is up 0.3%. The S&P emini is down 0.3%. Oil prices are off their intraday highs but WTI is still up 0.3% to $80.10/bbl. Copper is 0.1% higher and iron ore is steady around $118/t.
• Later the Fed’s Williams speaks and the Beige Book is published. In terms of data, US Richmond & Dallas Fed indices and German preliminary CPIs for May print.