AUDUSD - Inflation in Australia, under control?!The AUDUSD currency pair is below the EMA200 and EMA50 in the 4H timeframe and is moving in its medium-term bearish channel. In case of an upward correction due to the release of today's economic data, we can see a supply zone and sell within that zone with a suitable risk reward.
Yesterday, China urged the United States to change its stance on Taiwan’s independence, asking it to clearly state “we oppose Taiwan independence” instead of “we do not support Taiwan independence.” The United States, however, refused to make this change and continues to maintain informal relations with Taiwan, providing support and military supplies to the island.
Additionally, reports indicate that China’s top legislative body is reviewing a new financial package valued at over 10 trillion yuan, likely to be announced on November 8. China plans to raise 10 trillion yuan in new debt over the coming years through special treasury and local government bonds. This financial package includes 6 trillion yuan to mitigate local government debt risks and up to 4 trillion yuan for purchasing idle lands and properties.
Should Donald Trump win the U.S. presidential election, China may unveil an even stronger financial package. Moreover, China is planning to issue over $1.4 trillion in additional debt in the coming years.
A poll by Ipsos shows that the popularity gap between Kamala Harris and Donald Trump among registered voters has narrowed to one percentage point, with Harris at 44% support, just one percent ahead of Trump at 43%.
BlackRock CEO Larry Fink has predicted that the Federal Reserve will cut interest rates by 25 basis points at least once more in 2024. He also remarked that the decline in U.S. interest rates will be less than people expect.
Australia’s inflation data largely met expectations and was insufficient to prompt any change in the Reserve Bank of Australia’s (RBA) rate decision. Annual inflation for the third quarter stood at 2.8%, slightly below the expected 2.9%. The monthly rate was 2.1%, with the total inflation at 2.8%.
This annual inflation rate is the lowest since early 2021; however, core inflation remains above the RBA’s 2-3% target. The reduction in annual inflation is mainly due to government subsidies and lower gasoline prices, although service inflation remains high.
The RBA will hold a meeting on November 4-5, and given these figures, no rate cut is expected during this session. The final meeting will be on December 9-10, and no rate cut is anticipated for that session either. February remains the anticipated timeframe for analysts, though if the labor market remains strong and core inflation is high, a rate cut may be delayed until April or May.
