European Open: Aussie inflation comes in soft, China PMI’s beat, BOE in focus

Asian Indices:

Australia's ASX 200 index fell by -0.1 points (0%) and currently trades at 7,258.30
Japan's Nikkei 225 index has risen by 42.38 points (0.15%) and currently trades at 27,487.94
Hong Kong's Hang Seng index has risen by 666.01 points (3.37%) and currently trades at 20,451.95
China's A50 Index has risen by 190.83 points (1.43%) and currently trades at 13,581.34

UK and Europe:

UK's FTSE 100 futures are currently up 14 points (0.18%), the cash market is currently estimated to open at 7,890.28
Euro STOXX 50 futures are currently up 1 points (0.02%), the cash market is currently estimated to open at 4,239.38
Germany's DAX futures are currently up 13 points (0.08%), the cash market is currently estimated to open at 15,378.14

US Futures:

DJI futures are currently up 14 points (0.04%)
S&P 500 futures are currently down 0 points (0%)
Nasdaq 100 futures are currently down -2.75 points (-0.02%)

The RBA will be pleased to see that GDP and inflation data came in soft today, even if the latter remains highly elevated. The Australian economy grew just 0.5% in Q4, or 2.7% y/y – which is right on their December growth target. Of particular interest is to see the household savings ratio fall to a 4-year low of 4.5% q/q.

CPI data came in at 7.4% y/y, much less than the 8.1% forecast and 8.4% prior – but it is by a wide enough margin to tease the thought that inflation may have peaked. But it’s not coming down fast enough to say the RBA will not hike for at least two more meetings, given it remains more than twice their 2-3% target range. Still, it’s a start.

China’s PMI’s beat expectations and expanded in February as the economy began to feel the benefits of its reopening
According to official government statistics data, manufacturing PMI rose to a 10-year high of 52.6 and a separate private read shows expansive activity for the first time in seven months
A host of regional CPI figures for Germany a released between 07:30 to 09:00 GMT, which could prompt further buying for the euro if they came in hot (like Spanish and French PMI did yesterday
Yet a weak data set could help push EUR/JPY lower again, in line with our daily bias
BOE governor Andrew Bailey speaks at 10:10 GMT at the Cost of Living Crisis Conference organised by the Brunswick Group, hosted at Coin Street Social Enterprise, London
Fed member Christopher Waller provides his economic outlook at 21:00 GMT
ISM manufacturing data is at 15:00 today, and if it contracts at a faster pace and shows lower ‘prices paid’, it could further weigh on the US on bets of a lower terminal Fed rate

EUR/JPY 1-hour chart:

A bout of risk-off saw EUR/JPY fall sharply from its highs yesterday and break trend support on the 1-hour chart. Given prices have retraced just under half of yesterday’s losses and is headed for a resistance zone, were now looking for a swing high and move down towards the daily S1 pivot. At the time of writing, the pair is trying to form a bearish engulfing candle around the daily pivot point, weekly R1 and 144.58 high. And a weak set of inflation reports from Germany could potentially help send it lower.

Economic events up next (Times in GMT)

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.