Technical Analysis

ForexLive Asia-Pacific FX news wrap: Australian (monthly) CPI jumps higher


It
was a subdued range day here in major FX. USD/JPY has ticked up a
little, to above 132.50. The only news of note from Japan during the
session was a retailer (admittedly a big one!) saying it was raising
wages. The news was greeted with approval from Japan’s chief
cabinet secretary Matsuno.

From
Australia today we had job vacancies data, retail sales data, and
monthly CPI data. While retail sales came in solid, and job vacancy
numbers remained historically elevated, the most focus was on the
jump in headline and core CPI. The data was for November 2022. The
monthly CPI releases from Australia are incomplete, the monthly numbers include updated prices for only between
62 and 73 per cent of the weight of the quarterly CPI basket; thus
its the quarterly CPI that is the most focus. Nevertheless, rising
headline and core CPI is not something the RBA will just shrug off.
Reserve Bank of Australia Governor Lowe has made specific mention of
monthly CPI rates in his statements previously. The next RBA policy
meeting is February 7, a +25bp rate hike is the consensus analyst
expectation at this stage. Keep in mind that the December monthly and
Q4 quarterly CPI will be published prior to the February meeting, on
January 25 and may prompt changes to expectations and market pricing.

AUD/USD
popped a few points on the data but soon retraced to be, as I update,
barely changed on the session.

Speaking
of the South Pacific down here. We had data from ANZ NZ on New
Zealand commodity export prices. Unless you are into Kiwi $
fundamentals you may not pay much attention to this report. The ‘but’
is, though, that as part of this report ANZ take a look at global shipping
prices, which is, of course, much more widely applicable than just to
the NZD. Today they noted:

  • Global
    shipping prices have fallen sharply and are nearing pre-pandemic
    levels.
  • Demand
    for container shipping has also fallen as consumer demand for
    manufactured goods eases.
  • Ship
    operating costs have reduced due to lower fuel prices, as well as
    fewer delays at ports as congestion dissipates.
  • Shipping
    demand is expected to remain weak until after the Chinese New Year
    holiday period, with the volume of goods traded globally throughout
    2023 forecast to remain subdued

ANZ
have been on top of falling shipping prices for well over a year now. Separately, note
that an online freight marketplace is showing that the cost of
shipping a 40-foot container from China to America’s west coast is
now US$1,400, down 93% from its peak of $20,600 in September 2021.

Oil
lost some ground. The private survey of inventory (See bullets above)
reported a huge weekly build, contributing to the softer price.

Asian
equity markets:

  • Japan’s
    Nikkei 225 +1%

  • China’s
    Shanghai Composite +0.2%

  • Hong
    Kong’s Hang Seng +1%

  • South
    Korea’s KOSPI +0.1%

  • Australia’s
    S&P/ASX 200 +0.9%

USD/CNH relatively subdued also:

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