Jump to content

AU February CPI preview and what's next for ASX 200

Recommended Posts

According to figures released today by the Australian Bureau of Statistics (ABS), Australian retail turnover rose 0.2% in February.


bg%20asx%20200%20639626932.jpgSource: Bloomberg

 Tony Sycamore | Market Analyst, Australia | Publication date: Tuesday 28 March 2023 

Ben Dorber, ABS head of retail statistics, said retail sales rose modestly in February and appear to have levelled out after a period of increased volatility over November, December and January.

Why is today's retail sales data important for the RBA?

The Minutes from the RBA's March Board meeting noted that it would be appropriate to pause its rate hiking cycle "at some point" to assess the effects of prior rate hikes. As part of its considerations, it would closely watch incoming employment, inflation, business surveys and retail sales data.

The latest updates of those criteria showed:

  • Employment data (released in mid-March) was stronger than expected
  • Consumer confidence remains at GFC levels. Business Confidence is softening
  • The Australian Composite PMI fell in March to 48.1 vs 50.6 in February
  • Retail Sales are down 1.5% over the three months to February.

What about inflation?

Wednesday sees the release of the Monthly CPI indicator for February, a relatively new economic indicator that shot to prominence in the accompanying Statement from the March Board meeting. "The monthly CPI indicator suggests that inflation has peaked in Australia".

The Monthly CPI indicator was also referred to extensively in the Meeting Minutes, which noted that tomorrow's release would include quarterly data on "domestic services inflation, which was not available in the January release".

Domestic services inflation data encompasses restaurants & takeaway, hairdressing, urban transport fares, communication, as well as audio-visual & computing services and hobbies.

For the record, the market expects the monthly CPI indicator to increase by 7.2% in February from 7.4% in January. The range of estimates extends from 6.7% to 7.7%.

What does it mean for the RBA meeting next week?

Given that the balance of data has slowed in recent months and due to the uncertainty created by the banking crisis, if tomorrow's monthly inflation indicator prints at or below the 7.2% expected, there is a good chance that the RBA will keep the cash rate unchanged at 3.60% next week.

Aware that a print of 7.5% or higher would likely see the rates market rush to price in a rate hike at next week's Board Meeting.

What does it mean for the ASX 200?

The ASX 200 is trading at 7042, +80 points (1.15%), on track for its best day since Mid-January. Leading the charge, the heavyweight Energy (+3.98%), Materials (2.28%) and Financial (+1.36%) sectors.

Today's rebound is in line with the view that the ASX 200 has been looking for a low.

Providing it holds above support at 6900, the pullback from the February 7567 high is viewed as a countertrend (an "ABC" Elliott Wave correction) and we expect the rally to extend initially towards 7200 before 7350.

ASX 200 daily chart


XJO_2023-03-28_14-25-01.pngSource: TradingView

  1. TradingView: the figures stated are as of March 28th, 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • In a world where gaming is one of the most used forms of relaxation, a good number of projects have evolved to give gamers an immersive experience alongside passive earning opportunities to earn from. Through time, there has been a plethora of crypto gaming projects. With AxieInfinity being its progenitor, we have witnessed expansive growth with how certain projects have extended its tentacles. Currently, one of the projects that has caught my eye is $NADA. The project is one of the pioneer gaming models on the Hedera Blockchain Network. Primarily, it seeks to be used in blockchain based NFT mobile games where the latter and metaverses are interconnected seamlessly. Most of the games it is associated with have considerable pedigree in the global market. In a bid to let users earn seamlessly, NADA looks to allow players earn tokens through game play thus projecting gamefi. In the exactitude of real world use-cases, the token can be used for purchasing in game items, et al. Deducing from all of its features, it is incredibly worthy to note that the token has good use cases and tokenomics. In recognition of this, reliable platforms like Bitget have expressed intent to list it along a significant number of activities to earn from, depositing the token is even opened on there already. Conclusively, I'll love to hear your thoughts on this new model? 
    • Blockchain and gaming complement each other nicely. Their fusion has enabled real rewards for gamers, something that traditional games don’t offer. What’s more, BlockchainxGaming effectively manages the ownership and transaction history of game characters, items, etc, enforces property rights, promotes transparency, stability, reliability and improves fun. As blockchain and NFT-based games continue to drive the game market's growth, the hunger to play more and earn more deepens. Nada Protocol is proposing a blockchain technology and ecosystem with customized structure that will fuse with the global mobile game market and NFT blockchain game market, satisfying game players’ cravings with a more immersive mobile game experience where they can own and trade the items they earn from the game. NADA focus seems to be centered around creating a fun blockchain gaming ecosystem that adds the value of economic activity to the pleasure of gameplay. One of the most significant of its core features is a buzzing marketplace where users can conveniently find the items they want and trade them with other users. Much of the activities in Nada marketplace is controlled by NADA token, a reward-type token built on the Hedera network, and currently building up liquidity to list on Bitget. What’s your thought on this fast-growing game and its chances to carve a niche for itself in the competitive gaming world?
    • Thanks very much, @KoketsoIG. I hadn't discovered the drop down menus - it all makes much more sense now! It's odd about the E1 contracts - it must be a new change, because I'm in the UK and I currently hold some of the E1 positions that I opened a few weeks ago. Anyway, at least now I understand what's going on. I'll try not to bother you with too many questions as I get used to the new platform! Best wishes, Cate
  • Create New...