In December, U.S. consumers' short-term inflation expectations fell to their lowest level in nearly three years.
Australia's retail sales in November experienced their most significant increase in two years.
The swap trade suggests that the RBA's tightening campaign may be over.
On Tuesday, the outlook for AUD/USD turned bearish on the back of a stronger US dollar, as investors strategically positioned themselves for the upcoming US inflation report. On Thursday, U.S. inflation data is likely to provide more support for the Fed's policy outlook in the coming months.
In Australia, retail sales in November experienced the most significant increase in two years thanks to Black Friday discounts.
Despite a 425 basis point rise in interest rates, consumer spending remains resilient. This is due to house prices**, population surges, and savings from pandemic stimulus. However, given the distortions caused by Black Friday sales, the Reserve Bank of Australia is likely to ignore the November retail sales results.
Meanwhile, swap data suggests that the RBA's tightening campaign may be over. In addition, there will be about 40 basis points of easing in 2024.
Elsewhere, a survey by ANZ showed a significant increase in consumer confidence in Australia by early 2024. It reached its highest level in almost a year. Notably, homeowner confidence has risen sharply due to house prices** and the belief that interest rates may have peaked.
Meanwhile, data released on Monday showed that short-term inflation expectations of US consumers fell to their lowest level in nearly three years in December. As a result, bets on a Fed rate cut rose slightly.
AUD/USD key event today - none.
Looking at the AUDUSD 4-hour chart, AUD bulls failed to break above 30**, which allowed the bears to resume their downward trend. Stop at ** including 06674 support level and 0After a strong support area at the 618 Fibonacci level, the pair is **to**. A break above 30 would signal a bullish relay, allowing for a retest of 06775 resistance level. However, given that the index is still below and the RSI is below 50, the trend remains bearish.