The first part of the headline is related to today’s Australian Q1 CPI data which say the ‘trimmed mean’ measure of core inflation (the RBA’s go-to measure of underlying inflation) jump above the top of the Reserve Bank of Australia’s target band of 2 – 3% to 3.7% y/y. The headline rate hit a whopping 5.1%. Both of these exceeded the central median estimates.
The second part of the headline is the clear and present implication for the upcoming RBA policy meeting on May 3. The RBA is well behind the curve on its inflation mandate and the consensus is rapidly shifting to looking for a hike next week, from June prior to the inflation data today.
AUD/USD had inched higher prior to the data but jumped higher still on the release, from around 0.7150 to around 0.7170. Its since slipped back to under 0.7150 and as I update is circa 0.7160.
NZD/USD dribbled a little lower in the back of some selling against the AUD.
News and data flow was light otherwise.
We had no comments from Japanese authorities today wailing about yen weakness. USD/JPY lows circa 127.00 early on have since given way to a USD/JPY rally to 127.60 and just above.
USD/CAD softened just a little while EUR, GBP, CHF are not moving much at all.
Gold lost a few $.