Australian CPI Data Better Than Expected

The big news of the morning so far has been the Australian CPI which came in at 0.7% against the expected value of 0.5%. This caused a pop in the value of the AUD against all other currencies but a closer analysis of the data showed that though the headline inflation came in better than expected the core inflation, which is the real juice of the data and the data which the RBA pays most attention to, still continues to be weak around 0.4% and this will ensure that the RBA will continue to remain unmoved and on hold for the rest of the year. This realisation brought in a large number of sellers in the currency who managed to keep a lid on the upmove.

In other parts of the market, we saw the release of quarterly earnings from Apple overnight which was mixed as the numbers showed that the sales had declined when compared to the same period last year though the outlook for the future remains strong. This should disappoint the markets slightly which could see a slight correction in the stock markets for today.

The yen continues to be weak today morning though we saw some high volatility in it yesterday. Looking ahead to today, the only major news from around the world is the release of the oil inventory data from the US which is likely to affect the prices of oil which have been steady and consolidating over the past week or so on expectations of a continuing production cut from the OPEC producers. So far, this plan has been successful in keeping the oil prices supported but it remains to be seen on how long this agreement will hold as cracks have started appearing already in the agreement with Iraq refusing to cut production as it needs the funds to rebuild their battered economy.
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