Australian wholesale inflation came in significantly lower than anticipated yesterday at 1% vs. a median forecast of 1.6%, sparking a market rally in advance of the CPI number on Wednesday. This is one of the main reasons why Asia acts better than Europe. Rates hikes have been more vigilant across the region, particularly by Aussi central banking head, Glenn Stevens.
Reported inflation in July could come in lower than consensus expectations, globally. I think this is one of the primary reasons as to why the shorts are being continuously squeezed this past week, and why the top side of my short term trading range can be achieved.
Chart by Andrew Barber, Research Edge