ForexLive Asia-Pacific FX news wrap: Higher than expected Australian CPI data, AUD up

• Why the stronger yuan might prompt a PBOC rate cut
• European Central Bank speakers Wednesday include Schnabel
• Australia- inflation a bit higher than expected, RBA on hold
• 4 reasons why the RBA may be the last major central bank to cut rates
• AUD/USD jumped above 0.6500 on higher than forecast inflation data for Q1 of 2024
• Australian Q1 CPI +1.0% q/q (expected 0.8%) 3.6% y/y (expected 3.4%)
• US Senate passes US$95bn aid bill for Ukraine, Israel, Taiwan
• PBOC sets USD/ CNY mid-point today at 7.1048 (vs. estimate at 7.2363)
• Under half of analysts expect a BoE rate cut in June
• About 70% of companies in Japan will implement pay-scale increases in fiscal 2024
• Bank of Japan meeting this week – preview
• Trump advisers are planning US dollar devaluation if he gets elected
• Japan data – March Services PPI 2.3% y/y (prior +2.1%)
• JP Morgan’s Pinto doubts the Federal Reserve will be cutting rates this year
• US authorities express elevated fears about a terrorist attack like that seen in Russia
• New Zealand March trade balance +588mn (prior -218mn)
• HSBC bearish GBP/CHF, target is 1.1
• UBS is dialling back plans in China – high costs, poor profit outlook
• US SEC is unlikely to approve spot ETH ETFs in May – price to rise regardless
• Goldman Sachs on 2024: expects earnings, equities to rise, inflation & rates to fall
• Oil – private survey of inventory shows a draw vs. the build that was expected
• Forexlive Americas FX news wrap: Softer PMI weighs on US dollar
• Trade ideas thread – Wednesday, 24 April, insightful charts, technical analysis, ideas

There
were items on the data calendar of interest for the session here.

The
private survey of oil inventory showed a draw compared with the build
that was expected. Oil prices have remained fairly steady since, in a
tight range.

From
New Zealand, we had a trade surplus recorded in March. Exports showed
a welcome rise but imports fell to their lowest since the middle of
2021. NZD/USD has risen on the session slightly, helped along by a
higher AUD (more on this below).

Services
PPI in Japan for March rose, for a second month in a row. The Bank of
Japan holds the view that rising service prices will supplant
cost-push inflation as a key driver of price inflation towards its 2%
target. The data supported this view (to the extent that it gets
passed along in consumer prices).

The
big data point, though, was the Q1 CPI from Australia. The headline
rate, and the two core rates, all jumped more than expected. This has
implications for the Reserve Bank of Australia, at the very least
delaying potential rate cuts. Indeed, Westpac
analysts
pushed
back their
RBA
rate cut forecast to November from September. AUD/USD
jumped above 0.6500 on the inflation data release and has barely
pulled back since.

In
geopolitically significant news the US Senate passed the bill to
provide
US$95bn in aid to Ukraine,
Israel, and Taiwan:

• $60.8
  billion for Ukraine
• $26.4
  billion for Israel
• $8
  billion for Taiwan

The
bill also included the potential to ban TikTok. US President Biden
says he will sign the bill into law on Wednesday.

Apart
from the AUD move, FX was sedate. USD/JPY continues to wiggle along
just under 155.00.

AUD/USD update:

This article was written by Eamonn Sheridan at www.forexlive.com.