What happened across the Asia session?
The Australian quarter-on-quarter Wage Price Index came in at 0.7% (expected 0.8%, previous 0.7%). It is a leading indicator of consumer inflation as businesses pass on the higher cost of labour to the consumer.
What does it mean for Europe and US Sessions?
The CPI data from the UK (expected 9.1%, previous 7.0%) and Canada (expected 0.5%, previous 1.4%). would set expectations for the pace of rate increases amid toppish inflation levels in the US.
The Dollar Index (DXY) Update
Key news events today
No major news events.
What can we expect from DXY today?
Fed chair Powell stated that there is broad support for the FOMC to have 50bps hikes on the table at the next two meetings. The central bank will not hesitate to raise rates until inflation comes down.
Central Bank Notes:
Next 24 Hours Bias
Strong Bullish
Gold (XAU) Update
Key news events today
No major news events.
What can we expect from Gold today?
The assertion by the US central bank chief on the interest rate hike path to quell inflation is likely to weigh on the non-interest-bearing precious metal.
Next 24 Hours Bias
Weak Bearish
The Euro (EUR)
Key news events today
No major news events.
What can we expect from EUR today?
ECB’s Knot stated that a 25bps hike in rates is realistic while a 50bps bump is also likely but dependent on incoming data that would suggest that inflation is widespread.
Central Bank Notes:
Next 24 Hours Bias
Mixed-to-Weak Bullish
The Swiss Franc (CHF)
Key news events today
No major news events.
What can we expect from CHF today?
With the slow but gradual turn expected from the ECB, the SNB is likely to follow suit since the latter tends to lag the former in terms of monetary policy directives.
Central Bank Notes:
Next 24 Hours Bias
Mixed-to-Weak Bullish
The Pound (GBP)
Key news events today
CPI y/y, 0600 GMT
What can we expect from GBP today?
BoE’s Cunliffe hinted at a drop in risky assets as quantitative tightening progresses. A lower-than-expected UK CPI (expected 9.1%, previous 7.0%) would tame hawkish expectations somewhat.
Central Bank Notes:
Next 24 Hours Bias
Mixed
The Canadian Dollar (CAD)
Key news events today
CPI m/m, 1230 GMT
What can we expect from CAD today?
The country could add up to 500k in oil exports in 2022 and another 400k bpd in 2023.
The US crude oil inventories report is expected to see a build of 2.1m (previous 8.5m) while the month-on-month Canadian CPI is expected at 0.5% (previous 1.4%).
Central Bank Notes:
Next 24 Hours Bias
Mixed-to-Weak Bearish
Oil
Key news events today
No major news events.
What can we expect from Oil today?
The improving Covid-19 situation in China on the demand front is likely to be balanced by a proposed global cap on Russian oil prices on the supply front.
Next 24 Hours Bias
Mixed