What happened in the US session?
The US ISM PMI increased slightly to 47.7 from the previous month’s reading of 47.4, somewhat lower than the forecasted value of 47.9. Despite the slight increase, the recent reading suggests that the manufacturing sector is experiencing a contraction.
What does it mean for the Asia Session?
The latest data on CPI y/y in Australia suggests that while inflationary pressures are still present, they may be starting to ease. This could lead to reduced demand for gold in the short term.
The Dollar Index (DXY)
Key news events today
Unemployment Claims
What can we expect from DXY today?
The US Unemployment Claims are expected to slightly increase from last week’s 192,000 figure, with a forecasted number of 196,000. A significantly higher number could negatively impact the US dollar since the strong labour market partly underpins the rate hike trajectory.
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 lower-than-expected Australian CPI figure could indicate that inflationary pressures in Australia are starting to ease. This could reduce demand for safe-haven assets, such as gold, as investors become more confident in the economy.
Next 24 Hours Bias
Bearish
The Australian Dollar (AUD)
Key news events today
Building Approvals m/m
What can we expect from AUD today?
The Building Approvals m/m for AUD is forecasted to decrease by 7.1%, following a significant increase of 18.5% in the previous data. This suggests there may have been a slowdown in the construction industry, potentially impacting the AUD negatively.
Central Bank Notes:
- Cash rate stands at 3.35%
- Future rate rises are expected as RBA targets the 2-3% inflation target
- Next meeting on 7 March 2023
Next 24 Hours Bias
Bearish
The Kiwi Dollar (NZD)
Key news events today
Overseas Trade Index q/q
What can we expect from NZD today?
The Overseas Trade Index q/q for NZD is expected to decrease by 1.7%, an improvement from the previous quarter’s decline of 3.4%. This is a crucial indicator for the country’s international trade activity, with a negative figure potentially putting pressure on the NZD.
Central Bank Notes:
- Monetary Policy Committee increased the OCR from 4.25% to 4.75%
- Higher interest rates are needed to reduce inflation and support employment sustainably
- Severe storms in North Island will increase inflation and disrupt production.
- Next meeting is on 5 April 2023
Next 24 Hours Bias
Weak Bearish
The Japanese Yen (JPY)
Key news events today
No major news events.
What can we expect from JPY today?
Expectations from Japan’s upcoming data releases suggest mixed signals for the economy, possibly negatively impacting capital investments and lending activity. At the same time, an increase in consumer confidence may positively affect consumer spending and overall economic growth.
Central Bank Notes:
- Cash rate stands at -0.1%
- Expanded range for 10-year JGB yield fluctuations to 0.5%
- Next meeting is on 8 March 2023
Next 24 Hours Bias
Weak Bearish
