Daily digest market movers: CPI ahead of Jackson Hole

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  • Japan must seek a new prime minister as Fumio Kishida does not want to run for a second term.
  • The Royal Bank of New Zealand (RBNZ) surprised the market with a 25 basis point interest rate cut during the Asian session on Wednesday and the message that the cutting cycle has started. RBNZ Chairman Adrian Orr even said that a 50 basis point cut was on the table for this meeting. A comment that sent the New Zealand Dollar 1% lower against the US Dollar. 
  • At 11:00 GMT, the Mortgage Bankers Association (MBA) will release its weekly Mortgage Applications Index for the week ending August 9. The previous week, it was up 6.9%
  • At 12:30 GMt, the US consumer inflation data for July will be released:
    • Headline monthly CPI inflation is expected to rise by 0.2% in July following the -0.1% the month before. The yearly benchmark is expected to remain at 3.0%.
    • Core monthly CPI inflation is expected to increase by 0.2% after the 0.1% in June. The yearly gauge is expected to soften to 3.2% from 3.3%.
  • Equity markets are rallying higher in Japan based on the political news that a new prime minister needs to be found. The Topix trades up over 1%, while the Nikkei lags by 0.4%. European equities are up less than 0.5%, while US futures are flat, awaiting the US CPI release. 

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