What happened across the Asia session?
The Aussie year-on-year CPI has decreased to 7.4% from the previous value of 8.4% but is still higher than the forecasted value of 8.1%. This indicates that inflation is still a concern for the economy, but the rate of increase has slowed down compared to the previous period.
What does it mean for Europe and US Sessions?
Should the MoM German inflation come in lower than expected, the USD should continue its recovery rally against the major currencies as the trend of slowing inflation seems to persist.
The Dollar Index (DXY) Update
Key news events today
ISM Manufacturing PMI
What can we expect from DXY today?
The upcoming release of the ISM Manufacturing PMI is expected to improve slightly, with a consensus estimate of 47.9 (previous 47.4). However, a reading below 50 still indicates a contraction in the manufacturing sector.
Central Bank Notes:
- The Committee has raised the federal funds rate target range to 4.5-4.75% and plans to continue increasing it to return inflation to 2%
- The Committee will monitor incoming information and adjust the stance of monetary policy as appropriate to achieve its goals
- A majority vote from the Committee supported the decision to raise the target range
- Next meeting is on 23 March 2023
Next 24 Hours Bias
Weak Bearish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
The US Consumer Confidence report indicated a reduction in inflation expectations compared to the previous month, potentially hurting gold prices as the yellow metal is often seen as a hedge against inflation.
Next 24 Hours Bias
Bearish
The Euro (EUR)
Key news events today
German Prelim CPI m/m
What can we expect from EUR today?
The German Prelim CPI m/m is forecasted at 0.5%, lower than the previous figure of 1.0%. This indicates that the inflation rate in Germany is expected to slow down. Since the country is the largest economy in the Eurozone, its expected release may impact EUR negatively as the ECB may be influenced to be less hawkish in their path on interest rate hikes.
Central Bank Notes:
- Main Refinancing Rate is currently at 3.00%
- ECB Governing Council to continue raising interest rates and reducing holdings of securities
- Future policy decisions to be data-dependent
- Next meeting on 16 March 2023
Next 24 Hours Bias
Bearish
The Swiss Franc (CHF)
Key news events today
Retail Sales y/y
Manufacturing PMI
What can we expect from CHF today?
Although negative, the expected figure for Swiss’s Retail Sales (y/y) is expected to show a slight improvement of -2.2% compared to the previous release of -2.8%. This may indicate a gradual recovery in the retail sector.
On the Manufacturing PMI front, the forecasted figure of 50.4 suggests a slight improvement from the previous figure of 49.3, indicating a modest expansion in the manufacturing sector.
Central Bank Notes:
- Current policy rate is at 1.00%
- Next meeting on 23 March 2023
Next 24 Hours Bias
Mixed
The Pound (GBP)
Key news events today
BOE Gov Bailey Speaks
What can we expect from GBP today?
As the conference to be attended by the BoE Governor is focused on the cost-of-living crisis, his speech and any audience questions could lead to Governor Bailey addressing monetary policy implications due to the country’s stubbornly high inflation.
Central Bank Notes:
- MPC voted to increase Bank Rate by 0.5 percentage points to 4%
- Near-term data developments are crucial in assessing how quickly external and domestic inflationary pressures will abate
- MPC’s updated projections show CPI inflation falling back sharply from its current level
- Next meeting on 23 March 2023
Next 24 Hours Bias
Mixed
The Canadian Dollar (CAD)
Key news events today
Manufacturing PMI
What can we expect from CAD today?
The upcoming data release for Canadian Manufacturing PMI will provide insights into the manufacturing sector’s performance. In the previous release, the PMI figure was reported at 51.0, indicating modest expansion in the manufacturing industry.
Central Bank Notes:
- Increased rates to 4.50%; indicated pause of future rate hikes
- Inflation in Canada is projected to drop to around 3% in the middle of 2023
- Goal is to reach the 2% inflation target by 2024
- Next meeting on 8 March 2023
Next 24 Hours Bias
Bullish
Oil
Key news events today
Crude Oil Inventories
What can we expect from Oil today?
The upcoming data release for crude oil inventories is expected to decrease to 1.7 million barrels, compared to the previous week’s figure of 7.6 million. This indicates a potential reduction in the supply of crude oil, which may lead to a rise in oil prices if demand remains stable or increases.
Next 24 Hours Bias
Bullish
