- AUD performs solidly headed through to NY hours following the surprising rate hike from the RBA overnight. The bank raised its cash rate by 25 basis points to 3.85%, stressing that it aimed to return inflation to its 2-3% target in a "reasonable timeframe" and strengthening language on future hikes. RBA Governor Lowe said in the accompanying statement that “further tightening may be needed”. At typing, AUD/USD is narrowing in on the 200-dma at 0.6734 - a break above here would target the mid-April highs of 0.6806.
- The market response to Eurozone CPI was more muted - the headline topped forecast by 0.1ppts, but core was inline with expectations. As such, there was little movement in implied ECB rate hike pricing for this week's meeting - with ~29bps priced in.
- CHF is the poorest performer alongside GBP, while AUD and SEK outperform most others. The USD Index is off the lows, sitting slightly higher pre-NY.
- Focus ahead turns to JOLTS job openings data, final durable goods data for March as well as a speech from RBA's Lowe at 1220BST.
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