AUD Climbs as Oil Slides, RBA CPI Looms

Market Snapshot

Asset	Level	Change
ASX 200	8,772.30	-0.75%
NZX 50	13,850.69	+0.57%
AUD/USD	0.70	+0.40%
NZD/USD	0.58	+0.08%
AUD/NZD	1.21	+0.30%
BHP	58.85	-2.94%
Gold	4,089.20	+0.53%
Brent Crude	87.75	-9.33%
Bitcoin	64,972.49	-0.56%
Australia 10Y Govt Yield	4.83%	-3.03%
NZ Short-term Rate	4.33%	-9.60%

Prior Economic Events

Data	Prior	Cons	Actual
No events available

Today's Economic Events

Data	Prior	Cons	Time
RBA Gov Bullock Speech	-	-	19:05
Inflation Rate Month-over-Month	-0.70	0.20	17:30
Inflation Rate Year-over-Year	4	4	17:30
RBA Trimmed Mean CPI Month-over-Month	0.40	0.40	17:30
RBA Trimmed Mean CPI Year-over-Year	3.60	-	17:30
RBA Hunter Speech	-	-	14:40
ANZ Business Confidence	36.60	-	17:00
Building Permits Month-over-Month Prel	-1.10	-0.50	17:30
PPI Quarter-over-Quarter	0.40	0.30	17:30

Australian markets closed lower with ASX 200 at 8,772.30 (-0.75%) while NZX 50 rose to 13,850.69 (+0.57%).
AUD/USD advanced to 0.70 (+0.40%) as Brent crude fell 9.33% to 87.75, easing imported inflation concerns.
RBA cash rate holds at 4.35% and RBNZ OCR at 2.50% ahead of Australian CPI and RBA speeches.

Yesterday's Recap

Equity markets diverged across the Tasman as the ASX 200 fell 0.75% to 8,772.30, pressured by a 2.94% drop in BHP shares, while the NZX 50 gained 0.57% to 13,850.69. The Australian dollar strengthened to 0.70 against the US dollar, supported by a sharp 9.33% decline in Brent crude that reduced imported inflation risks for Australia. New Zealand’s short-term rate eased 9.60% to 4.33%, reflecting softer local funding conditions.

Australian 10-year government yields dropped 3.03% to 4.83%, signalling reduced rate-hike expectations ahead of tomorrow’s inflation print. NZD/USD edged up 0.08% to 0.58, tracking the broader commodity currency recovery. Gold rose 0.53% to 4,089.20, providing modest support to Australia’s trade balance given its status as a key export.

No major data releases occurred in either Australia or New Zealand yesterday, leaving market moves driven by global oil dynamics and positioning ahead of the RBA Governor Bullock speech.

The Day Ahead

Attention centres on RBA Governor Bullock’s speech at 19:05 AEST today, which may clarify the central bank’s reaction function ahead of the inflation release. Tomorrow brings Australia’s July CPI data at 17:30 AEST, with year-over-year expected to print at 4.0% and month-over-month rebounding to 0.2%. The RBA trimmed mean measures will also be watched for underlying price pressures.

New Zealand’s ANZ Business Confidence survey at 17:00 AEST on 29 July will offer an early read on corporate sentiment. Australian building permits and PPI data later in the week will round out the domestic calendar, while RBA Board member Hunter speaks on 29 July.

Other Economic Notes

Australia’s commodity export profile continues to dominate regional flows, with iron ore and LNG prices sensitive to Chinese demand signals. New Zealand’s dairy and tourism sectors remain exposed to global growth and travel trends, though construction activity has slowed. Housing markets in both countries stay sensitive to rate expectations, with Australian yields near multi-year highs reflecting persistent inflation concerns.

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Other Economic Notes (continued)

China’s growth trajectory remains the dominant external driver for ANZ terms of trade and currency performance. Broader tariff and geopolitical risks continue to influence RBA policy deliberations.

Global Macro News

Easing Middle East tensions and the sharp drop in oil prices have reduced near-term imported inflation risks for both Australia and New Zealand, supporting AUD and NZD gains. Markets are now pricing a higher probability of RBA rate hikes later this year following strong Australian jobs data. The Federal Reserve’s upcoming decision will influence global rate differentials and AUD/USD direction, with Washington policy settings mattering more than Canberra developments for the currency outlook.

Japanese yen weakness and Singapore’s stronger dollar policy add to the complex external backdrop facing ANZ central banks. Global equity sentiment remains mixed, with commodity price volatility directly affecting Australian mining revenues and New Zealand export earnings. BBH analysts note that any extension of the RBA pause could weigh on AUD, while stronger Chinese PMI prints would provide counter-support.

ANZ Central Banks Watch

The RBA maintains its cash rate at 4.35% while the RBNZ holds the OCR at 2.50%, preserving a significant policy divergence between the two inflation-targeting frameworks. Australian CPI at 3.96% year-over-year keeps the RBA focused on underlying measures, with tomorrow’s print likely to determine whether August tightening remains on the table. The RBNZ has historically moved more aggressively; its current lower rate reflects softer New Zealand inflation at 4.06% year-over-year and cooling housing credit growth.

RBA Governor Bullock’s speech today may signal whether the committee views recent jobs strength as sufficient to justify further tightening. Minutes from recent meetings show both banks monitoring global commodity prices and China demand closely. Any sustained oil price decline would ease pressure on both central banks but could widen the rate path gap if Australian inflation proves stickier.

ANZ Macro Daily(Beta Mode)