Asia Morning Bites: Australian Inflation in Focus Amid Market Movements

Asia Morning Bites

Eyes down for Australian inflation. Markets brace for weaker payrolls after JOLTS decline in job openings. ADP due later.

Global markets: There was a lot of green on the boards across the equity world yesterday. Both US, European and Chinese stock indices all rose on the day. The S&P and NASDAQ rose 1.45% and 1.74% respectively, while the Hang Seng and CSI 300 rose 1.95% and 1.0%. The earlier announcement in China of stamp duty cuts and curbs on share sales by major shareholders may have provided some lingering support. Falling US Treasury yields possibly added some additional “oomph” to the US equity market. 2Y US Treasury yields fell 11bp to 4.894%, and the yield on the 10Y Treasury bond fell 8.2bp taking it to 4.12%. EURUSD picked up to 1.0876, having briefly traded below 1.08 intraday. Other G-10 currencies also rallied against the USD. The AUD rose to 0.6480, Cable pushed up to 1.2644, and the JPY reversed a move up towards 147.50 and came all the way back to 145.89. These moves lifted the SGD too, which has pulled back below 1.35. The PHP and VND both lost ground yesterday.

G-7 macro: It was a thin day for Macro, but it nonetheless contained some interesting data releases. The US JOLTS survey showed a sharp drop in job openings, falling from 9165K to 8827K. This was way down on the 9500K openings that had been forecast. There was also an unexpected and sharp decline in the Conference Board’s consumer confidence indicators, including those relating to the labour market. And the US house price purchase index also came in a little softer than had been expected. Germany’s GfK consumer confidence survey also came in on the low side. Today, German preliminary CPI data for August are due. The US publishes the second release of 2Q23 GDP as well as the ADP employment survey (195K expected), to whet our appetites (or perhaps just to confuse us) before Friday’s payroll numbers.

Australia: July CPI inflation data is forecast to decline to 5.2%YoY from 5.4% in June. But the July data will also include some chunky electricity tariff increases, so we think there is a chance the number is higher than this, with an outside chance that inflation actually rises from last month.

Australia building approvals and CPI (30 August)
South Korea retail sales (30 August)
US MBA mortgage applications, ADP employment, GDP and pending home sales (30 August)
South Korea industrial production (31 August)
Japan retail sales (31 August)
China PMI manufacturing and non-manufacturing (31 August)
Thailand trade balance (31 August)
Hong Kong retail sales (31 August)
India GDP (31 August)
US initial jobless claims, PCE deflator and personal spending (31 August)
Japan capital spending and Jibun PMI (1 September)
South Korea trade (1 September)
Regional PMI (1 September)
China Caixin PMI (1 September)
Indonesia CPI inflation (1 September)
US NFP, ISM manufacturing and industrial production (1 September)

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