PREVIOUS TRADING DAY EVENTS 28 June 2023

Australias monthly CPI indicator rose to 5.6 annually in May, down from 6.8 in April. A measure of core inflation was also reported lower, signalling that the Reserve Bank of Australia RBA might not have to raise interest rates again in July.

The market reacted with high AUD depreciation as the expectations of future hikes are now shifted to a pause instead. However, the labour market data are closely being monitored by analysts who suggest that a hike is actually more probable to happen.

The number is at the very lower end of the range of economists expectations which ranged from 6.9 to 5.6 and is soft enough by a good margin to see the RBA halt its series of rate hikes in July and possibly beyond, said Tony Sycamore, market analyst at IG

With the labour market still very tight, unit labour cost growth surging and the housing market bouncing back with a vengeance, we suspect that the Bank will press ahead with another rate hike next week, said Marcel Thieliant, a senior economist at Capital Economics.

Source httpswww.reuters.commarketsaustraliasconsumerinflationhits13monthlow20230628

Yesterday, leaders of the worlds top central banks participated in a panel discussion titled Policy Panel at the ECB Forum on Central Banking, in Sintra. Further policy tightening was discussed and stated as necessary to counter high inflation, highlighting that recession must be avoided. 

U.S. Federal Reserve Chairman Jerome Powell kept…