Aussie rose mildly in Asian session after release of inflation data. Headline CPI rose 0.2% mom, 1.3% yoy in Q1, slowed from prior quarter's 1.7% yoy. That's inline with market expectation. RBA trimmed mean CPI rose 0.6% qoq, 2.3% yoy. That was indeed higher than expectation and prior quarter's 2.2% yoy. There are talks that slowing headline CPI would clear the way for RBA to cut interest rate again in May. However, according to swap data, traders were pricing in around 60% chance of a May cut, comparing to near 70% before the inflation data release. While we're still leaning towards a May cut, markets are clearly not decided on the issue. And that's clearly reflected in the lack of direction in AUD/USD recently. Technically, a breakout from range of 0.7532/7937 is needed to clear the picture. Before that, outlook in the pair stays cautiously bearish.
In Japan, it's reported that BoJ would likely lower inflation forecast to 1.0% for the year to March 2016 and maintain the price projection of 2.2% for fiscal 2016 and 2017. Thus, there would also be talk of watering down the time frame for hitting the target in fiscal 2015. However, economists would still have much doubt on such forecast as the result of an independent research showed expectation of around 0.35% inflation for the current fiscal year and less than 1.25% for fiscal 2016. Released from Japan, trade balance was at JPY 0T in March comparing to expectation JPY 0.41T deficit. Yen stays steady in range while Nikkei surged with other Asian stocks and hit 15 year high.
According to EU statistics office data, Eurozone government debt rose to a record 91.9% of GDP last year, up from 90.9% in 2013. That was due to surge in peripheral debts. Greek debt rose to new high of 177.1% of GDP, comparing to 175% a year earlier, and, around 156.9% back in 2012. Italian debt, the second highest in the region, also surged to 132.1% of GDP, comparing to 128.5% the previous year. Portugal was in third with 1302.% of GDP, up from prior year's 129.7%. Nonetheless, next in line, Irish debt dropped to 109.7%, down rather sharply from 123.2%. Meanwhile, Eurozone deficit stood at 2.4% of GDP, down from 2.9% the year ago.
Looking ahead, BoE minutes will be the main focus in European session and Swiss will release ZEW expectation. Eurozone will release consumer confidence. US will release house price index and existing home sales later in the day.