What happened in the US session?
The US CB Consumer Confidence index fell to 102.9 in February, down from 106.0 in January, marking a second consecutive month of decline. This figure also missed the forecasted value of 108.5, suggesting that US consumers may have become more cautious in their outlook.
What does it mean for the Asia Session?
The USD recovery is likely to continue against the antipodeans amid weaker-than-expected data releases from the antipodeans.
The Dollar Index (DXY)
Key news events today
ISM Manufacturing PMI
What can we expect from DXY today?
The upcoming release of the ISM Manufacturing PMI is expected to improve slightly, with a consensus estimate of 47.9 (previous 47.4). However, a reading below 50 still indicates a contraction in the manufacturing sector.
Central Bank Notes:
- The Committee has raised the federal funds rate target range to 4.5-4.75% and plans to continue increasing it to return inflation to 2%
- The Committee will monitor incoming information and adjust the stance of monetary policy as appropriate to achieve its goals
- A majority vote from the Committee supported the decision to raise the target range
- Next meeting is on 23 March 2023
Next 24 Hours Bias
Weak Bearish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
The US Consumer Confidence report indicated a reduction in inflation expectations compared to the previous month, potentially hurting gold prices as the yellow metal is often seen as a hedge against inflation.
Next 24 Hours Bias
Bearish
The Australian Dollar (AUD)
Key news events today
CPI y/y
What can we expect from AUD today?
CPI year-on-year is expected to be 8.1%, lower than the previous rate of 8.4%, indicating that Australia’s overall inflation rate may slow down slightly, easing rate hike pressures from the RBA. On the other hand, the GDP quarter-on-quarter growth is projected to be 0.7%, somewhat higher than the previous quarter’s rate of 0.6%.
Central Bank Notes:
- Cash rate stands at 3.35%
- Future rate rises are expected as RBA targets the 2-3% inflation target
- Next meeting on 7 March 2023
Next 24 Hours Bias
Weak Bearish
The Kiwi Dollar (NZD)
Key news events today
Building Consents m/m
What can we expect from NZD today?
The Building Consents m/m is forecasted to decrease by 7.2%, following a drop of 4.4% in the last month. This suggests a downward trend continuation in the building industry. The decline in building approvals may weigh on the NZD, which could weaken against other major currencies.
Central Bank Notes:
- Monetary Policy Committee increased the OCR from 4.25% to 4.75%
- Higher interest rates are needed to reduce inflation and support employment sustainably
- Severe storms in North Island will increase inflation and disrupt production.
- Next meeting is on 5 April 2023
Next 24 Hours Bias
Bearish
The Japanese Yen (JPY)
Key news events today
Final Manufacturing PMI
What can we expect from JPY today?
The JPY is expected to remain stable in the short term. The Final Manufacturing PMI for Japan is forecasted to be 47.4, the same as the previous reading, indicating a continued contraction in the manufacturing sector.
Central Bank Notes:
- Cash rate stands at -0.1%
- Expanded range for 10-year JGB yield fluctuations to 0.5%
- Next meeting is on 8 March 2023
Next 24 Hours Bias
Weak Bearish
