This week has seen lower-than-expected inflation data in New Zealand and Canada, while British inflation remained stubbornly high.
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- New Zealand CPI (inflation) data released a few hours ago showed a surprise drop in the quarterly rate from 1.4% to 1.2%, when a rise to 1.5% had been widely expected. This places the annualized rate at 6.7%. The New Zealand Dollar weakened following the release as it suggests a more dovish tilt could be forthcoming from the RBNZ, with the NZD/USD currency pair now trading at a 1-month low price.
- Several soft commodities are performing well, with the Sugar ETF CANE and the Cocoa ETN NIB reaching new multi-year high prices, while the Coffee ETF JO has also made a strong bullish breakout.
- In the Forex market, the US Dollar has firmed against its long-term bearish trend, boosted by rising short-term US Treasury yields. Trend traders may be watching for a new short trade if confirmed by a renewed weakening in the greenback, probably looking to be long of the EUR/USD or GBP/USD currency pairs, both of which are in confirmed long-term bullish trends. Over today’s Asian session, the Euro looked like the strongest major currency, while the New Zealand Dollar was the weakest.
- US Federal Reserve member Williams said that the Fed will act to bring down overly high inflation, estimates it will take 2 years to get CPI down to the 2% target.
- Bitcoin made a decisive bearish rejection of the $30k area.
- British CPI (inflation) data released yesterday showed annualized inflation falling from 10.4% to 10.1%, slightly higher than the 9.8% which was the consensus forecast.
- Today will see a release of US Unemployment Claims data.
- The Governor of the Bank of Canada will be testifying today before Parliament about banking, commerce, and the economy.
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