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CPI Day: Aussie Tests 0.7043, Then Waits for the Number
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What’s New
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- Oil retreats a second day: Brent dropped back below US$110, down from near US$117.50 at Friday’s peak, after reports that Iran’s leadership met to weigh terms for ending the conflict, including security of the Strait of Hormuz.
- Record Aussie shorts: Bloomberg reports asset manager short positions in the Australian dollar hit a record during the recent risk-off run. A crowded short is fuel for a squeeze if today’s inflation print runs hot.
- Wall Street holds its breath: US stocks and yields edged higher in cautious pre-Fed trade, even as the AI rally lost steam after Anthropic’s IPO filing and Meta upsized its share sale to almost US$98 billion.
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Still in play: The Fed hold at 5:00am Thursday, tonight’s UK Budget, French bond strain and Friday’s ECB and BoJ decisions.
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Key Message: Three events in 18 hours: CPI at 11:30am, the RBNZ at noon and the Fed at 5:00am tomorrow. With speculators record short the Aussie and 0.7043 tested again overnight, a hot trimmed mean has more room to move the pair than a soft one.
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AUD/USD
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Overnight (previous session)
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Open
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High
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Low
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Close
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Change
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0.7017
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0.7043
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0.7013
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0.7029
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â—„â–ş Neutral 0.00%
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Falling oil and a greenback that firmed against everything except the commodity currencies lifted the Aussie to 0.7043, the top of its recent range, before it settled flat at 0.7029 in quiet pre-Fed trade. Today’s CPI decides the week: headline is expected at 4.2% y/y with the trimmed mean at 0.3% m/m, and Governor Bullock speaks at 11:15am, fifteen minutes before the print. Technically, 0.7043 has now turned the pair back four sessions running and is the gate to the 0.7044 to 0.7080 band, while the 200-day EMA near 0.6984 is the first real support if the number disappoints.
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Currency Pair Directions
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Pair
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Weekly Direction
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Range Bias
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AUD/USD
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â—„â–ş Neutral
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Fourth rejection at 0.7043 overnight; a hot CPI at 11:30am opens 0.7080, a soft one sends it back to test 0.6984
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AUD/EUR
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â–˛ Higher
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The euro took the brunt of overnight dollar strength; French yields stay elevated into Friday morning’s ECB hold
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AUD/GBP
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â—„â–ş Neutral
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Sterling options are already pricing tonight’s Budget at 11:30pm; a clean fiscal story keeps a November BoE hike on track
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AUD/JPY
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â—„â–ş Neutral
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Cheaper oil and steadier stocks took the edge off yen demand, but Friday’s BoJ decision caps the cross for now
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AUD/NZD
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â—„â–ş Neutral
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A hike to 3.00% at noon is priced; a statement that signals more hikes favours the kiwi, a one-and-done hands it back to the Aussie
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Data key: â–˛ Higher (green) | â—„â–ş Neutral (amber) | â–Ľ Lower (red)
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Upcoming Data Releases This Week
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Date
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Release
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Prior
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Forecast
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Impact
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Wed 28 Oct
11:30am AEDT
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AU CPI m/m / CPI y/y / Trimmed Mean CPI m/m
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0.4%
4.0%
0.2%
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0.7%
4.2%
0.3%
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High
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Wed 28 Oct
12:00pm AEDT
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NZ RBNZ Official Cash Rate, Rate Statement and Press Conference (1:00pm)
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2.75%
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3.00%
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High
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Wed 28 Oct
11:30pm AEDT
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UK Annual Budget Release and Autumn Forecast Statement
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N/A
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N/A
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High
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Thu 29 Oct
5:00am AEDT
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US Federal Funds Rate, FOMC Statement and Press Conference (5:30am)
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4.00%
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4.00%
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High
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Thu 29 Oct
11:30am AEDT
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AU Import Prices q/q
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5.7%
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1.8%
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Low
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Thu 29 Oct
11:30pm AEDT
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US Advance GDP q/q / Core PCE Price Index m/m
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2.2%
0.2%
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3.2%
0.3%
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High
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Fri 30 Oct
12:15am AEDT
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EU ECB Main Refinancing Rate, Statement and Press Conference (12:45am)
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2.65%
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2.65%
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High
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Fri 30 Oct
11:30am AEDT
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AU PPI q/q / Private Sector Credit m/m
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1.3%
0.6%
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1.0%
0.5%
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Low
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Fri 30 Oct
Time TBC (around midday Tokyo)
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JP BoJ Policy Rate, Statement, Outlook Report and Press Conference
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<1.25%
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<1.25%
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High
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Fri 30 Oct
9:00pm AEDT
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EU Prelim Flash GDP q/q / Unemployment Rate
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0.6%
6.4%
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0.2%
6.4%
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High
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Sat 31 Oct
12:30pm AEDT
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CN NBS Manufacturing PMI
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50.1
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50.1
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High
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Public holidays: none remaining this week in AU, US, CA, UK, EU, NZ or China. Heads up: US clocks go back on Sunday 1 November, so US releases land an hour later in Sydney from next week.
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