The
Australian dollar was a mover during the session here today. AUD/USD
tested higher in the Sydney morning, ahead of wages data due at
11.30am Sydney time. The Wage Price Index data for Q1 of this year
came in below central expectations on both q/q and y/y (see bullets
above). AUD/USD dropped in response, albeit not within a very large
range. Expectations of a 40bp rate hike from the Reserve Bank of
Australia at the June (7




^th




)
meeting were trimmed in response to the data.

USD/JPY
has also been a mover, down from highs just over 129.50 to be lows
circa 129.10. Lower AUD/USD and lower USD/JPY of course translates
into a heavy AUD/JPY. Other yen crosses dropped also.

EUR,
GBP, NZD, CAD had all gained a little against the USD early in the
session and all have given back this, to a greater or lesser extent.
USD/CAD is up 30+ points from its early lows under 1.2800.

WTI
popped above $114 but is back under as I update

Apart
from the Australian data we had the preliminary reading for Japanese
economic growth in the first quarter (January-March) of 2022. GDP
contracted (see bullets above). We also had data on Chinese house
prices in April. These fell m/m for the first time since December
2021 and recorded their slowest y/y gain since October 2015.

On
the central bank front had extended remarks from Charles Evans,
President of the Chicago Federal Reserve branch. Evans did not depart
from the current Fed chorus warning of rapid rises for Fed Funds in
the near term, and that the Fed would do more if needed. He did
express his expectation, though, that he sees a return to 25bp hikes
from July or September.

The
People’s Bank of China raised the CNY at the daily USD/CNY
reference rate
setting. CNY was moved higher by 440+ pips to 6.7421 against the USD.
This is the third consecutive day for a higher CNY against the USD at
the central rate setting.

AUD drop on the wages data – arrow