New Zealand CPI Comes in Better Than Expected

A fair bit of news around this morning, mainly in the Asia Pacific markets as New Zealand released its CPI data and that came in at 0.2% which was better than the expected 0%. But the surprise was not in the news but in the fact that there was a 50 pip pop in the NZD before the news which leads to suspicion but is something that is best left to imagination.

Today morning, we also saw the RBA Governor speak and also the Monetary Policy meeting minutes released by the RBA and what it basically said that they would like to wait and see the upcoming data, especially the CPI, before deciding on their policy during the next meeting which comes up in November. We believe that there would not be any rate cut during November and this would be positive for the Australian dollar and could lead to its upmove during the coming months, against weaker currencies like the CAD as its progress against the USD would be dependent on the Fed rate hike.

The other big mover for the morning has been the pound, though there was nothing fundamental to the move and more like a move made on very low liquidity as it broke through 1.2200 and went as far as 1.2280 before dropping back to the 1.2250s as of this writing.

For today, we have the CPI data from the UK and the US which are very important factors that are a gauge to the economic strength of the respective countries. The CPI data from the US will be especially important as it will help the traders decide whether there will indeed be a rate hike in December, which is something that a large part of the market expects. A strong reading will add to the expectations while a weaker one will probably rule out such a hike and disappoint the markets. All in all, a volatile day ahead.
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