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March 16 - According to a report by Irans Fars News Agency on the evening of March 15, a spokesperson for the Iranian Islamic Revolutionary Guard Corps stated that most of the missiles currently being launched by Iran were "produced 10 years ago," and many missiles produced by Iran after the "12-Day War" in June last year "have not yet been used," and many of Irans missile arsenals "remain untouched."U.S. Energy Secretary Wright: Prices today are still far below those during the Biden administration, when they were asking Iran for favors, haggling, and even bribing Iran to “perform better.”Canadian Prime Minister Carney: I have arrived in London, England. The United Kingdom is one of Canadas oldest and most reliable partners.According to Irans Tasnim News Agency, Iranian President Pezehizian spoke by phone with French President Macron to discuss regional developments.March 16th - A Financial Times article points out that this week will be a "super central bank week." While the interest rate decisions of these central banks are not expected to bring any surprises, the policy guidance accompanying these decisions will be closely watched given the ongoing conflict in the Middle East. The four major central banks – the Federal Reserve, the European Central Bank, the Bank of England, and the Bank of Japan – will announce their decisions one after another on Thursday Beijing time. In addition, interest rate setters from Australia, Brazil, China, Canada, Indonesia, Sweden, and Switzerland will also meet this week. With the exception of the Reserve Bank of Australia, the other central banks are likely to keep interest rates unchanged. However, the war in Iran has increased the likelihood of a rate hike later this year. The interest rate market has responded hawkishly to the impending energy price shock; expectations for rate cuts by the Federal Reserve and the Bank of England have been erased, replaced by the possibility of a rate hike by the latter. Expectations for a rate hike by the European Central Bank this year have also increased further. Since the start of the war, the Bank of Japans interest rate path has remained relatively unchanged.

AUD/USD falls below 0.7070 despite a positive Services PMI from Caixin

Alina Haynes

Feb 03, 2023 15:29

Despite the release of good Caixin Manufacturing PMI (January) data from IHS Markit, the AUD/USD pair has established a new daily low at 0.7064. The economic data came in at 52.9, which is significantly higher than the consensus estimate of 47.3 and the prior report of 48.0. China's Services PMI has stayed upbeat despite the Lunar New Year celebrations in the last week of January.

 

Notable are the facts that Australia is China's largest trading partner and the Australian Dollar is its currency.

 

The Australian Dollar is likely to be influenced by the Reserve Bank of Australia's (RBA) anticipated interest rate announcement on Tuesday. In view of the unexpected rise in the Australian Consumer Price Index (CPI) to 7.8% in the fourth quarter of CY2022, RBA Governor Philip Lowe may maintain his aggressive stance regarding interest rates.

 

Deutsche Bank Australia analysts believe that the RBA will likely hike the Official Cash Rate (OCR) to 4.1%, citing the most recent inflation update, which revealed a slightly higher-than-anticipated 7.8% increase in the CPI. Forbes Advisor states, "While the RBA will likely move more slowly in 2023 than it did in 2022, we now anticipate four additional 25 basis point hikes in 2019: 25 basis points in February and March, and 25 basis points at the May and August meetings."

 

In the meanwhile, investors have been risk-averse due to rising anxiety preceding the United States' Nonfarm Payrolls (NFP) data release. Futures on the S&P500 and other perceived-risk assets are under heavy pressure. The US Dollar Index (DXY) has rebounded to approximately 101.50 after a corrective move and is expected to remain under the hands of bulls moving forward. In anticipation that the Federal Reserve (Fed) may suspend its policy tightening, 10-year US Treasury yields have fallen to approximately 3.38 percent.


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