Australian CPI jumps, as do RBA rate hike bets and the Australian dollar. Read from the bottom up for the chronology:
Other:
Q3
inflation data from Australia was the focus going into the session.
The data showed stronger than expected CPI growth, the q/q for each
of the three main measures came in above Q2 and higher than
expectations (see bullets above). While y/y rates fell the key is the
q/q rising so strongly. In addition, inflation is still sitting above the Reserve Bank of Australia’s forecasts. New RBA Gov. Bullock has
expressed more hawkishness than previous Gov. Low and said less than
24 hours ago that the RBA will hike again if there is a material
upward revision to its inflation forecasts. Stir in a still strong
employment market, with unemployment not too far from 50-year lows
and the result is very, very likely to be a rate hike from the Bank
at its next meeting, on November 7. When I say ‘very, very likely’, you
can read that as ‘lock it in’. I expect a 25bp rate hike.
As
I post two (ANZ & CBA) of the ‘big four’ Australian banks have already
revised their forecasts to tip a November rate hike. One of the
others (NAB) was already forecasting this. I’m sure Westpac will be
the same but I haven’t seen a note just yet.
AUD/USD
jumped after the release of the data, hitting a high of circa 0.6400.
Its dribbled back to under 0.6385 as I post. NZD/USD followed a
similar pattern. Movement across major FX rates otherwise has been
dull.
There
is not a lot of movement to report on oil or gold. BTC jumped early
in the session but has sat around $34K since.
Chinese
stocks gained, helped by stimulus announcements earlier this week.
Hong Kong reduced its home-buying tax, helping further.
Asian
equity markets:
-
Japan’s Nikkei 225 +1.3%
-
China’s Shanghai Composite +0.5%
-
Hong Kong’s Hang Seng +1.5%
-
South Korea’s KOSPI -0.5%
-
Australia’s S&P/ASX 200 -0.02%