January 25, 2023 10:03 GMT
AUD on Top as CPI Shoots Higher
- Australia posted a stronger set of inflation data, which was uniformly above market expectations, and helped pushed market pricing to a 25bps hike for the February meeting. CPI at 8.4% was well above the 7.7% expectation, meaning Australia ended 2022 with inflation well ahead of target. The release prompted some sell-side analysts to consider the likelihood of a 50bps move at the RBA's February meeting, putting AUD ahead of all others in G10 ahead of the NY crossover.
- Conversely, NZ inflation came in below RBNZ expectations, which has worked against the NZD and yield momentum for the currency. NZD/USD fell to 0.6467, but dips have been supported, through the European morning.
- JPY is gaining against most others in G10, with some focus paid to BBG citing an ex-BoJ economist in expecting the new BoJ governor to shift away from the yield curve control programme. EUR/JPY has traded poorly across European hours, and sits below yesterday's 131.26 lows ahead of the NY crossover.
- The Bank of Canada rate decision takes focus Wednesday, with the bank seen raising rates by 25bps to 4.50% for the final hike of the cycle. Data releases and central bank speakers are few and far between Wednesday, with the Fed remaining inside their media blackout period.