Annualized Australian inflation unexpectedly rose from 6.3% to 6.8%, increasing the case for another hike by the RBA and sending the Aussie to a 6-month low against the US dollar.

1. Australian inflation data released a few hours ago showed Australia’s CPI unexpectedly hotrepresenting the annualized rate of inflation, which increased from 6.3% to 6.8%, when it was expected to increase only very marginally to 6.4%. This will increase the likelihood of further rate hikes by the RBA. After the release, the Aussie is falling with remarkable bearish momentumwith currency pair AUD/USD trading at a 6 month low.
2. The US debt limit deal was approved by a congressional committee, sending the deal to a full House vote. It is strongly expected to pass.
3. China’s stock market falls sharply, p HSI trading at a new 6-month low, acting as a drag on global stock markets, most of which fell yesterday. however the NASDAQ 100 index it hit a new 1-year high yesterday before selling off later in the session.
4. On the forex market, the US dollar is rising againagainst its long-term bearish trend. Action so far today has been dominated by the weakness of the New Zealand dollar and the strength of the Japanese yen. However, trend traders will likely still look for long trades in USD/JPY a currency pair that recently hit a new 6-month high while being short NZD/USD AUD/USD will also be attractive. The Kiwi remains weak after the RBNZ last week signaled its cap rate had been reached in a surprise move.
5. Yesterday’s release of US CB Consumer Confidence data turned out a little better than expected.
6. German preliminary CPI (inflation) data will be released later today.in which the month-on-month inflation is expected to decrease from 0.4% to 0.2%.
7. Canada’s GDP data will be released later today, which is expected to see a small month-on-month decline in economic growth of 0.1%.
8. US JOLTS Job Opening data will be released later today.