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Container ship damaged off UAE, hit by suspected projectile near Strait of HormuzWestpac lifts RBA peak rate forecast to 4.35%, sees RBA hiking rates in March and MayAustralian bank analysts are piling on to forecast an RBA rate hike next weekWeak yen and oil shock cloud Japan inflation outlook — PPI recapPBOC sets USD/ CNY central rate at 6.8917 (vs. estimate at 6.8824)Goldman Sachs February CPI preview signals gradual inflation slowdown, not everyone agreesThe IEA is weighing a record oil reserve release to calm markets after Hormuz disruptionJapanese wholesale prices +2.0% y/y in February (2.1% expected)ICYMI: Debate grows over political influence on Bank of Japan policyICYMI: RBA’s Hauser warns oil price risks could intensify rate rise debate (March 17 live)US destroys 16 Iranian mine vessels and warns over Strait of Hormuz, more detailTrump thanks India Reliance for investment in new Texas refinery projectG7 to discuss energy coordination as Mid East tensions lift oil prices: 1400 GMT WednesdayNorth Korea tests cruise missile for destroyer and backs Iran (KJU attention seeking)Lagarde says eurozone not in stagflation as ECB keeps rate path uncertainUS stocks mixed. NASDAQ closes marginally higher. The S&P marginally lower.investingLive Americas market news wrap: A complete mess in oil. Other markets tune outOracle beats Q3 estimates as cloud revenue growth drives $90B outlook (shares jump)Summary:Oil markets remained in focus as the U.S. said it eliminated 16 Iranian mine-laying vessels near the Strait of Hormuz.A Wall Street Journal report said the IEA has proposed the largest-ever release of strategic oil reserves, with countries to decide today.The G7 will meet at 1400 GMT to discuss energy coordination amid the Middle East conflict.Japan signalled it could release oil reserves independently if needed, while February PPI data came in softer.RBA Deputy Governor Andrew Hauser’s hawkish remarks yesterday triggered a wave of forecasts for a March 17 rate hike.AUD/USD rose to levels last seen in mid-2022, while Asian equities rallied, with the Nikkei above 55,500.Oil markets remained a key focus during the Asia session as developments around the Strait of Hormuz and emergency energy policy discussions helped drive sentiment.The U.S. military said it had eliminated 16 Iranian mine-laying vessels near the Strait of Hormuz, highlighting the security risks facing one of the world’s most important oil shipping routes. A Wall Street Journal report said the International Energy Agency has proposed the largest-ever coordinated release of strategic oil reserves to help stabilise crude prices. Countries are expected to decide later today whether to proceed with the release.Energy security will also be on the agenda at the G7 meeting scheduled for 1400 GMT, where leaders are set to discuss potential coordination measures. Oil prices have eased somewhat following these developments.Central bank developments also drew attention in the region. RBA Deputy Governor Andrew Hauser delivered remarks on a podcast Tuesday that were interpreted as notably hawkish just one week ahead of the next Reserve Bank policy meeting. His comments have prompted a cascade of analyst forecasts for a March 17 rate hike.Westpac, NAB, Citi and Deutsche Bank now expect the RBA to raise rates in both March and May, while Bank of America, UBS and Capital Economics forecast a hike at next week’s meeting. The shift in expectations helped push AUD/USD to levels last seen in mid-2022.In Japan, Trade Minister Akazawa said the government could release oil reserves independently if necessary and would not rule out any measures to ensure energy stability. Japan also released February producer price data, which showed a modest easing in wholesale inflation y/y and a surprise monthly deflation, supporting expectations for the Bank of Japan to hold off on policy normalisation at next week’s meeting.Regional equities were firm. China’s new energy sector climbed more than 3%, while Japan’s Nikkei rose over 2%, trading above the 55,500 level.
This article was written by Eamonn Sheridan at investinglive.com.
đź’ˇ DMK Insight
The potential RBA rate hike is a game changer for traders focused on AUD pairs. With Westpac’s forecast of a peak rate at 4.35%, the market’s expectations are shifting rapidly. If the RBA raises rates in March and May, it could strengthen the AUD against major currencies, particularly the USD and JPY. Traders should keep an eye on the AUD/USD pair, especially if it approaches key resistance levels. The backdrop of a weak yen and rising oil prices complicates Japan’s inflation outlook, which could lead to further volatility in JPY pairs. This situation isn’t just about the RBA; geopolitical tensions, like the recent incident near the Strait of Hormuz, can also impact oil prices and, by extension, currencies tied to commodities. Here’s the flip side: if the RBA doesn’t hike as expected, we could see a sharp pullback in AUD strength, creating a potential short opportunity. Watch for the RBA’s decision next week and monitor the AUD/USD for any breakout or reversal patterns. The immediate focus should be on how traders react to the rate hike news and any shifts in oil prices following geopolitical developments.
đź“® Takeaway
Watch the RBA’s decision next week; a hike could push AUD/USD towards key resistance levels, while a no-hike scenario may trigger a sell-off.
