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Asia Forex news roundup: Australian inflation rises

  • 27 October, 2021
  • 6:10 pm EEST

Asia Forex news roundup: Australian inflation rises

On Wednesday, October 27, 2021, forex news for Asia trading will be released.

The session’s main focus was the announcement of Australian inflation figures. Official inflation statistics in Australia is only released four times a year, and we received the CPI for the July-September quarter today:

As expected, the headline arrived.

However, core CPI measurements (underlying inflation) were hotter, exceeding expectations and entering the RBA target area for the first time since 2016.

The market reacted quickly, with Australia’s three-year bond rate jumping to its highest level since January 2020 and the Australian dollar surging. The AUD/USD pair temporarily traded to around 0.7535 and has subsequently tracked a slight pullback and sideways movement. The core inflation data has added fuel to the slow-burn assumption that the RBA will raise its cash rate far sooner than its oft-repeated estimate of not doing so until 2024 at the earliest. Markets for interest rates are already pricing in a raise in the next 12 months or so, with more to come.

Other figures released today indicated that New Zealand had a record trade imbalance and that industrial business earnings in China were improving. ANZ in New Zealand also released the results of their October Business Survey, highlighting the ‘key point’ that the country’s inflation pressures are skyrocketing .

Coal prices fell more in China today. Commodity futures in China are down across the board.

Aside from the AUD, FX rates were relatively low. The EUR and GBP are marginally higher against the USD, while the USD is slightly higher against the JPY and CAD. Gold fell a few dollars during the day here after falling overnight and retracing 50 % or so. However, it is still higher than its all-time lows in the United States. BTC/USD is also down for the session.

AUD marked higher upon the CPI data released .

 

INDICES  :

  • Dow industrial average up 14.68 points or 0.04% at 35755.83.
  • S&P index rose 8.19 points or 0.18% at 4574.67
  • NASDAQ index closed up 9.01 points or 0.06% at 15235.71.

EARNINGS :

  • Microsoft beat on the top and bottom line after the close.  Revenues $45.32 billion versus $43.97 billion estimate. EPS
  • Alphabet beat on top and bottom line after closes well. Alphabet revenues $65.12 billion versus $63.34 billion estimate. Earnings-per-share $27.99 versus $23.48 estimate

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