Australian dollar jumps today following strength in Asian equities and oil. The Aussie remains supported after RBA minutes. The minutes for the October meeting suggested that "there remained considerable uncertainty about momentum in the labour and housing markets". The minutes also noted that "data on CPI inflation for the September quarter and an update of the forecasts would be available at the next meeting. This would provide an opportunity to consider the economic outlook, assess the effects of previous reductions in the cash rate and review conditions in the labour and housing markets". Meanwhile, Governor Lowe noted in a speech today that, for the global economic outlook, "the biggest problem isn't that inflation is going to be too low, it is growth is going to be too low". We believe the 3Q16 CPI report due next week would be a market mover.
New Zealand dollar also follows and rises mildly, as further supported by inflation data. New Zealand CPI rose 0.2% qoq, 0.2% yoy in Q3, versus expectation of 0.0% qoq, 0.1% yoy. However, strength in the Kiwi could be limited as markets are still expecting another rate cut by RBNZ later in November. RBNZ assistance governor John McDermott said in a speech that "Interest rates are at multi-decade lows, and our current projections and assumptions indicate that further policy easing will be required to ensure that future inflation settles near the middle of the target range." Nonetheless, he's optimistic on growth as "strong net immigration and increased labor market participation have also boosted the supply potential of the economy, meaning that New Zealand has been able to grow at a robust pace without generating significant inflation."
In US, Fed Vice Chair Stanley Fischer indicated in the Economic club of New York that the Fed "is very close to its employment and inflation target. Fischer also noted that "having very low interest rates makes monetary policy more difficult". However, he also added that it's "not that simple" for the central bank to hike interest rates. the market has not changed the expectations of Fed funds rate hike, pricing in a 69.5% chance of an increase in December, unchanged from last Friday.
Inflation data will be the major focus today. UK will release CPI, RPI and PPI. US will release CPI too, together with NAHB housing market index. Canada will release manufacturing shipments.