Key Notes:
- Australia MI leading index m/m -0.3% vs. 0.1% previously
- Australia CPI q/q 0.2% vs. 0.1%; CPI y/y 1.3% vs. 1.7% previously; trimmed mean CPI q/q 0.6% as expected
- BoE Meeting minutes
- Italy retail sales -0.2% vs. 0.1%
Later:
- US HPI m/m
- Eurozone consumer confidence
- US Crude Oil inventories
GBP, AUD: Big movers of the day
The closely watched Australia Inflation numbers came out meeting expectations with most of the sub components coming out on or above estimates. The Australian Dollar staged a strong rally across the board on the news release.
Inflation numbers showed that for the first quarter of 2015, CPI rose 0.2%, above estimates of 0.1% and unchanged from the previous 0.2%. On an annualized basis, CPI dipped to 1.3% from 1.7%, meeting estimates but marking the slowest pace of growth in the numbers (last seen during Q2 of 2012)
The Aussie rallied close to 1% against the Greenback in the run up to the US trading session. The Kiwi Dollar also got a boost rising as much as 0.6% against the Greenback for the day.
The Japanese Yen remained subdued with no major news impacting the currency. USDJPY was volatile ranging between the highs of 119.5 and 119.3.
The European trading session did not see any major market moving events with the exception of Italy retail sales which fell -0.2% below expectations of 0.1%. The Euro was trading stronger against the Greenback briefly touching highs of 1.07885 before easing from the daily highs into the US trading session open.
The Bank of England’s meeting minutes showed that the MPC members see the interest rate decision to be a balanced one and that the temporary inflationary pressures seem to be easing away, indirectly hinting to a start of the rate hike cycle. However, wages continue to remain a concern as recent data showed two consecutive months of the average earnings index declining. Current estimates for the BoE rate hikes are seen around the Q1 of 2016.
The British Pound found renewed strength with the Cable reversing its previous losses to break the resistance near 1.495 to rally as high as 1.507 into the US trading session open. The currency however remains susceptible to the election uncertainty in the coming weeks and any such moves are likely to remain short lived and volatile.
The Greenback looks to be gaining back some ground after falling to day’s lows of 97.75. A break above 98.15 is required to pave way for further upside gains above 98.95. To the downside, a decline below 97.75 will see the US Dollar push lower to 96.42. There are no major news releases from the US today with the House Price Index data due but is not expected to move or influence the sentiment much. Eurozone consumer confidence is also due later this evening followed up by the US Crude Oil inventories report.
