Asia FX Market Focus Shifts to US Inflation as Oil Prices Fluctuate

Oil prices have been fluctuating in the range of $80-85 per barrel as markets remain uncertain about a potential Middle East deal. Despite toughened positions from both sides, US President Trump suggested Iran should pay reparations for attacks linked to Iran and domestic protests.

The focus today shifts to US CPI inflation, with a base case expectation of stabilization in core inflation at 0.17% month-over-month. This could provide space for US yields to stabilize.

The Reserve Bank of Australia (RBA) maintained its policy rate at 4.35%, with RBA Governor Michele Bullock warning of persistent inflation risks and hinting at future rate hikes if inflation remains sticky.

India's CPI inflation is expected to rise to 4.4% year-over-year from 4.3% previously, but RBI Governor Sanjay Malhotra said inflation is 'more or less under check', keeping interest rates on hold for now.