Australian CPI Falls In July, All Eyes On Nvidia Earnings Report

The Australian monthly CPI inflation came in lower than expected in July with Treasurer Jim Chalmers saying that the report was promising but the government would not become complacent as consumers still struggle.

However, the update that most analysts anticipate is the Nvidia Q2 2024 earnings report due to be released later today. Nvidia has benefitted from the AI tech boom, reaching a capitalisation of almost $3.2 trillion. Some economists suggest that any miss on Wall Street expectations could also impact the share prices of other tech giants.

Australia Monthly CPI Falls In July 2024

According to a report by the Australian Bureau of Statistics (ABS), monthly inflation fell to 3.5% in July from 3.8% recorded in June. This is the lowest monthly inflation level since March. Despite that, the inflation rate was 0.1% higher than anticipated by economists with some analysts suggesting that the Reserve Bank of Australia (RBA) could hesitate to lower borrowing costs in its upcoming monetary policy meetings.

Market analysts at Moody’s Analytics told Reuters that “July's inflation print is full of smoke and mirrors. At face value, the fight against inflation looks to have taken a massive step forward...but some of that improvement came from rebates that artificially lowered the cost of electricity.”

German GDP Fell In Q2 2024

A report published by Destatis, the federal statistics service, showed that Germany’s GDP growth fell by 0.1% in the second quarter of 2024, confirming the previous estimate. “After the slight increase in the previous quarter, the German economy slowed down again in spring,” said Ruth Brand, President of the Federal Statistical Office.

Commenting on Germany’s economic conditions, ING analysts said: “With disappointing second-quarter growth and almost all confidence sentiment indicators pointing south, the German economy is currently back where it was a year ago: stuck in stagnation as the growth laggard of the entire eurozone. Still, we are not ready, yet, to give up on at least some optimism for the second half of the year.”

Tokyo CPI August 2024 Report

On Thursday evening, the Japanese Statistics Bureau will publish its Tokyo CPI inflation data for the month of August. The Tokyo CPI report is considered by economists as an important indicator of Japan’s inflation numbers.

According to forecasts, headline Tokyo CPI inflation is expected to come in at 2.2% on a year-to-year basis, matching July’s reading. It should be noted that, as a report published last week showed, nationwide core CPI rose to 2.7%, on an annualised basis, in July.

The Bank of Japan (BoJ) Governor Kazuo Ueda told Japanese members of the parliament that the board would raise borrowing costs again if reports show that inflation hovers around the central bank’s 2% target in a sustainable way.

ECB’s Knott Says Comfortable With Gradual Rate Easing

European Central Bank (ECB) governing council member Klaas Knot said that he would have to wait for more financial data sets coming from the eurozone before deciding on whether to lower borrowing costs or keep them on hold after the September meeting.

Knot, a Dutch banker famous for his aggressive stance regarding monetary policy, said that “as long as our disinflation path still converges toward the return of 2 percent inflation before the end of 2025, then of course I’m comfortable with gradually taking our foot off the brake  — because then we need less restriction.”

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