Bullock warns Middle East-driven inflation risks now materialising
RBA Governor Bullock testified that inflation risks flagged in August are materialising, with Middle East conflict and AI boom pushing up prices.
Canada's August CPI matched expectations at 3.0% year-on-year, while core measures were mixed and the Canadian dollar fell on reduced rate hike odds.
The data broadly matched expectations, though slightly weaker on the margins. A key concern is the significant rise in gasoline prices in September, which occurred even with a 10 cent per litre federal gasoline tax holiday that has been extended through the end of the year.
The Canadian dollar declined after the release as traders lowered the odds of a Bank of Canada rate hike in October. Before the report, the probability was 58%, and it has edged lower in light trading conditions.
Separately, July manufacturing sales were softer than expected, coming in at -0.4% versus a forecast of -0.2%. Part of that weakness was due to revisions that lifted June's figure to +0.3% from an initial +0.1%.
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RBA Governor Bullock testified that inflation risks flagged in August are materialising, with Middle East conflict and AI boom pushing up prices.
Japan's headline CPI came in at 1.9% y/y in August, below the 2.0% forecast. Core-core CPI also missed expectations at 1.7%.
New Zealand's August trade deficit was -1349mn, with imports at 8bn and exports at 6.66bn. Food price inflation held at 1.9% y/y, unchanged from July.
The Fed raised rates by 25 bps to 3.75-4.0%, a unanimous vote under Warsh. Analysts split on inflation's duration, with UBS seeing gold pressure near-term but…