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CAFX Market Update 14/07/2022

Welcome to our daily market update where we help keep you informed on the latest happenings in the world of FX and show you what this means for the Mighty Aussie Dollar.
If you have any questions or would like anything further explained, please don’t hesitate to reach out to your account manager or email info@cafx.com

Key Data Being Released Today

Australia                    – Employment Change (Jun)
Unemployment Rate (Jun)
Participation Rate (Jun)
HIA New Home Sales (MoM)
United States            – Initial Jobless Claims
PPI (MoM) (Jun)
Canada                     – Manufacturing Sales (MoM) (May)

Macro Report

A hot US inflation report has shocked the financial markets. A reading of 9.1% has raised concerns for a possible supersized 100 basis-point rate hike as pressure piles on the Federal Reserve to become even more aggressive. The surge in US CPI print has also seen US stocks finish lower, with the S&P 500 reversing gains and NASDAQ finishing 2% lower.

The Aussie dollar continues to reflect a bearish atmosphere against the US dollar as a fresh wave of risk-off sentiment appears. Commodity prices also remain volatile. Brent crude was down slightly and gold saw a drop below the $1700USD per ounce level before recovering.

As expected, the Reserve Bank of New Zealand (RBNZ) raised rates by 50 basis-points, while the Bank of Canada (BOC) took the cue from the inflation report and hiked by a surprising 100 basis-points overnight. The recent week slump in commodity prices has proved to be a significant setback for the two commodity currencies and our Aussie dollar. While Australia’s rate decision is not due until next month, RBNZ and BOC’s rate decisions this week have highlighted RBA’s less aggressive rate hike path compared with other major central banks.

Today we await Australia’s unemployment data, followed by the US annual PPI forecasted to fall slightly to 10.7% for Jun, compared to the previous month’s print of 10.8%

AUD/USD Daily Chart

DXY (USD INDEX) Daily Chart

Major Global Markets 

Currencies Level Change (%)
AUD/USD 0.6756 -0.07
AUD/JPY 92.7850 -0.10
AUD/CNH 4.5365 -0.23
DXY 107.9570 -0.11
Rates Yield (%) Change
US 10 Year 2.93 -0.033
Aus 10 year 3.40 -0.029
Equities Level Change (%)
S&P 500 3801.78 -0.45
NASDAQ 11247.58 -0.15
ASX 200 6622  0.23
Commodities Level Change (%)
Iron Ore 107.50 -4.44
Gold 1733.90 -0.09
Brent Crude oil 99.57 -7.43