Australian inflation coming in hot. Traders await Tesla results
25 January 2023
Wednesday starts with a blast from Australia, where the inflation came much higher than forecast. On a yearly basis, CPI in Australia came at 8.4%, while the expected number was 7.6%. This goes against the recent worldwide trend, where inflation is mostly coming below the numbers anticipated by economists. There was only one possible reaction on the market: the Australian Dollar is by far the strongest currency in the pack at the moment.
Today’s calendar will be influential for another commodity currency – the Canadian Dollar. At the end of the European session, we will learn the rate decision from Canada, along with a statement, monetary policy report and press conference. Analysts are expecting a 25bp rise to 4.5%.
Talking about the calendar, we need to mention the events of Tuesday - a PMI day for most of the leading economies. It’s safe to say that in most cases, PMI came above expectations, especially in the US. In addition, in case of the French Flash Manufacturing PMI, German Flash Services PMI and Eurozone Flash Services PMI, we crossed the magical barrier of 50, signaling an expansion of this sector.
Indices are behaving suspiciously. S&P 500 broke the key down trendline but shortly after that entered a correction, which shows a lack of momentum. What’s more, other indices, like Dow Jones or German DAX, are still in a sideways trend, not confirming the optimism coming from the S&P 500. Buyers should just hope that the breakout was not fake and the rise will follow… soon.
Tuesday brought further meltdown on the natural gas market, with Nat Gas reaching another long-term low. Precious metals edged higher yesterday, with gold making a new long-term top. We do have a small correction in this sector today, but the main long-term trend remains bullish.
Earnings season accelerates today in the US, with companies like Tesla, IBM, and Boeing revealing their numbers. Tesla and IBM will do so after the market close, while Boeing will publish their earnings before the opening bell.