🔰 DAILY QUICK MARKET UPDATES 🔰
⚠️️ #USD ⚠️️
⛔ US CPI Comes in Hotter than Expected! Is a 75bps Rate Hike Locked in? This has been the Fed’s biggest worry: that inflation would become “entrenched” in the economy.
⛔ As a result of the data, not only does are the markets pricing in an 84% chance of a 75bps rate hike next week, but according to the CME’s FedWatch Tool, markets are also pricing in a 16% chance of a 100bps hike!
⚠️️ #USD ⚠️️
⛔ US CPI Comes in Hotter than Expected! Is a 75bps Rate Hike Locked in? This has been the Fed’s biggest worry: that inflation would become “entrenched” in the economy.
⛔ As a result of the data, not only does are the markets pricing in an 84% chance of a 75bps rate hike next week, but according to the CME’s FedWatch Tool, markets are also pricing in a 16% chance of a 100bps hike!
⚠️️ #GBP ⚠️️
🔰 What Will Happen to GBP/USD if the UK Surprises With Higher CPI?
⛔ Expectations are for a headline print of 10.1% YoY and a Core CPI print of 6.4% YoY. If the data is stronger than expected, will GBP/USD move higher? It may, but most likely not to the extent that the US Dollar did after the stronger US CPI.
⛔ The BOE, which is expected to hike 75bps next week, already warned markets of a potential 13% CPI reading in October and a recession beginning in Q4. Therefore, markets have been pricing in a potential higher inflation reading since the last BOE meeting (and GBP/USD is still much lower!).
🔰 What Will Happen to GBP/USD if the UK Surprises With Higher CPI?
⛔ Expectations are for a headline print of 10.1% YoY and a Core CPI print of 6.4% YoY. If the data is stronger than expected, will GBP/USD move higher? It may, but most likely not to the extent that the US Dollar did after the stronger US CPI.
⛔ The BOE, which is expected to hike 75bps next week, already warned markets of a potential 13% CPI reading in October and a recession beginning in Q4. Therefore, markets have been pricing in a potential higher inflation reading since the last BOE meeting (and GBP/USD is still much lower!).
⚠️️ #AUD ⚠️️
🔰 AUD Approaches Monthly Low Ahead of Australia Employment Report
🔰 AUSTRALIAN DOLLAR TALKING POINTS
⛔ AUD/USD falls back from a fresh monthly high (0.6916) as the update to the US Consumer Price Index (CPI) boosts expectations for another 75bp Federal Reserve rate hike, but data prints coming out of Australia may curb the recent decline in the exchange rate as job growth is expected to recover in August. As a result,
⛔ AUD/USD may track the negative slope in the moving average as CME FedWatch Tool now reflects a 100% probability for a 75bp rate hike on September 21, but the update to Australia’s Employment report may prop up the exchange rate ahead of the FOMC meeting as the economy is anticipated to add 35.0K jobs in August.
🔰 AUD Approaches Monthly Low Ahead of Australia Employment Report
🔰 AUSTRALIAN DOLLAR TALKING POINTS
⛔ AUD/USD falls back from a fresh monthly high (0.6916) as the update to the US Consumer Price Index (CPI) boosts expectations for another 75bp Federal Reserve rate hike, but data prints coming out of Australia may curb the recent decline in the exchange rate as job growth is expected to recover in August. As a result,
⛔ AUD/USD may track the negative slope in the moving average as CME FedWatch Tool now reflects a 100% probability for a 75bp rate hike on September 21, but the update to Australia’s Employment report may prop up the exchange rate ahead of the FOMC meeting as the economy is anticipated to add 35.0K jobs in August.