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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.
MNI London Bureau | +44 203-865-3809 |
MNI London Bureau | +44 203-865-3809 |

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