IC Markets Asia Fundamental Forecast | 16 September 2021

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What happened in the US session?

Both the UK and Canada saw their respective inflation data set rising above expectation, notably with the latter’s year-on-year inflation rising to its highest in nearly 20 years at 4.1% (prev. 3.7%). Both central banks are likely to shrug off the rise in inflation as transitory, however.

What does it mean for the Asia Session?

The Kiwi is likely to outperform its peers based off from the strength in its economy, reflected by latest upside surprise in the GDP figures. RBNZ is very likely to follow-through with its stance to raise rates in its October meeting by up to 50bps.

The Dollar Index (DXY)

Key news events today

Core Retail Sales m/m, 12.30pm GMT

Retail Sales m/m, 12.30pm GMT

What can we expect from DXY today?

Post retail sales figured to be released, the focus would shift to the FOMC meeting scheduled from 21-22 September. The lower-than-expected August jobs report and inflation may push a tapering announcement to the November FOMC meeting, however.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

The lower-than-expected rise in the US CPI raises doubts on Fed to introduce a timeline to taper asset purchases in the upcoming FOMC meeting next week, providing support to the precious metal with the US dollar and Treasury yields under pressure.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

Employment Change, 1.30am GMT

Unemployment Rate, 1.30am GMT

What can we expect from AUD today?

The labour data is expected to come in weaker for the month of August as the Delta variant spread impedes movement. RBA has factored a worsening condition for the country, extending its asset taper program from mid-November to mid-February 2022.

Next 24 Hours Bias

Weak bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The country’s GDP data set rose more than expected, with Q2 coming in at 2.8% (expected 1.1%) and 17.4% (expected 16.3%) on an annual basis. The odds of RBNZ raising rate by 50bps in the upcoming meeting in October is raised.

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Bank of Japan’s (BoJ) Governor Kuroda stated that policies would remain accommodative and a reduction in interest rates is possible, if deemed necessary.

The central bank expects a steady rise in inflation to 2%, though not before 2023. BoJ is committed to achieving the 2% inflation target as early as possible.

Next 24 Hours Bias

Weak Bearish