The AUDUSD is the strongest and the CHF is the weakest as North American session begins

The AUD is the strongest and the CHF is the weakest as the NA session begins. The AUD moved higher after the Reserve Bank of Australia (RBA) decided to increase the cash rate target by 25 basis points to 3.85% (expectation was unchanged). The RBA acknowledges that Australian inflation remains high at 7% and aims to return it to the target range within a reasonable timeframe. Despite recent data indicating a decline in inflation, the central forecast predicts a couple of years before inflation returns to the top of the target range, with expectations of 4.5% in 2023 and 3% in mid-2025. The board is concerned with the risk of high inflation expectations leading to larger increases in both prices and wages, given the limited spare capacity in the economy and low unemployment. The board's central forecast anticipates below-trend GDP growth, with an increase of 1.25% this year and around 2% over the year to mid-2025. The unemployment rate is forecast to gradually increase to around 4.5% in mid-2025. Some other comments from RBA Lowe: * Some further tightening may be required to meet that objective * We will do what is necessary to bring inflation back to target * We are not on a pre-set course * Paying attention to consumption, inflation, jobs, global economic developments * Australian dollar had responded to change in rates outlook since April pause In other news overnight German retail sales declined by 2.4%, while the forecast was for a 0.4% growth, and the previous month saw a 0.3% decrease. In contrast, the GBP Nationwide HPI m/m increased by 0.5%, outperforming the expected -0.5% and improving on the previous -0.7%. The CHF SECO Consumer Climate remained the same as the previous at -30, while the forecast was for a slight improvement to -22. Regarding the EU PMI results, Spanish Manufacturing PMI was 49.0, falling short of the 49.8 forecast and 51.3 previous. CHF Manufacturing PMI also missed expectations, coming in at 45.3 compared to the 47.2 forecast and 47.0 previous. Italian Manufacturing PMI recorded 46.8, below the forecast of 49.4 and the previous of 51.1. French Final Manufacturing PMI met expectations at 45.6, while the German Final Manufacturing PMI exceeded its forecast at 44.5. The Final Manufacturing PMI for the eurozone was 45.8, slightly higher than the 45.5 forecast. The EUR CPI Flash Estimate year-over-year came in at 7.0%, matching the forecast and slightly higher than the previous figure of 6.9%. The EUR Core CPI Flash Estimate year-over-year remained stable at 5.6%, aligning with the forecast and slightly lower than the previous 5.7%. Both measures remain well above the target from the ECB and will likely keep a tightening bias in play. The EUR is mixed in early US trading with modest up and down changes vs the USD, GBP, JPY, CHF and CAD. The EUR is down vs the AUD and NZD. U.S. stock futures are slightly lower as the Federal Reserve's policy-setting meeting begins today and concludes tomorrow with their rate decision at 2 PM ET. The Fed is expected to increase rates by 25 basis points. In earnings, Uber and Pfizer led the day's earnings reports for the open. Uber Technologies Inc. reported Q1 2023 earnings with an EPS of -$0.08, slightly better than the expected -$0.09. However, the revenue of $8.323 billion fell short of the expected $8.72 billion. Pfizer Inc. posted Q1 2023 earnings with an adjusted EPS of $1.23, surpassing the expected $0.98, and revenue of $18.28 billion, which exceeded the expected $16.59 billion. Uber shares are trading up at $35.40 after closing at $32.74 yesterday. Pfizer shares are trading at $39.63 up from the closing level of $39.21. AMD, Ford and Starbucks will release after the close. On the US economic calendar, The Job Openings and Labor Turnover Survey (JOLTS – expectations of 9.775 million versus 9.931 million last month) will provide insight into the labor market before Friday's crucial jobs report. US factory orders will also be released (both jolts and orders will be released at 10 AM ET) with expectations of 1.3% versus -0.7% last month. In the new trading day after the close New Zealand employment will be released for the quarter (unemployment rate 3.5% versus 3.4% last quarter with employment changes 0.5% versus 0.2% last quarter). Australia retail sales are expected to rise by 0.2%, unchanged from last month. US yields are lower to start the day. Crude oil is little changed. A snapshot of the market currently shows: * Spot gold is trading up $4.41 or 0.22% at $1986.53 * Spot silver is down $0.25 or -1% at $24.71 * WTI crude oil is down $0.19 at $75.46 * Bitcoin is trading at $28,070 which is little change from yesterday's trade in the market for US stocks major indices are down after yesterday's modest declines to start the trading month: * Dow Industrial Average -75 points after yesterday's minus 46.46.2 point * S&P index -8.37 points after yesterday's -1.61 point decline * NASDAQ index -5 points after yesterday's -13.90 point decline European traders are back after the Labour Day holiday, and shares are lower: * German Dax -0.33% * Frances CAC -0.57% * UK FTSE 100 -0.09% * Spain's Ibex -0.41% In the US debt market, the yields are lower: * 2 year yield 4.136%, -0.2 bps * 5 year yield 3.605%, -2.6 bps * 10 year yield 3.537% -3.6 bps * 30 year yield 3.781%, -3.6 bps In the European debt market, the benchmark 10 year yields are trading higher: This article was written by Greg Michalowski at www.forexlive.com.
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