US stocks rally on easing fears of a US recession. The Aussie dollar jumps after Governor Michele Bullock says the RBA won’t hesitate to hike and thought about hiking earlier this week. The RBI holds hawkishly. NZ inflation expectations drop.
In our bonus deep dive interview, ANZ Economist Dhiraj Nim explains why India’s success in reaching a sustainable current account deficit is masking under-investment.
5 things to know:
US stocks rose around 2% after lower jobless claims eased fears of a US recession and saw expectations of Fed rate cuts this year ease about 13 bps to 97 bps, says ANZ Economist Bansi Madhavani.
The Aussie dollar rose 1.1% to 65.91 USc by 4am Sydney/Melbourne time after RBA Governor Michele Bullock said in a speech the board considered hiking on Tuesday and wouldn’t hesitate to hike again.
The Reserve Bank of India held rates at 6.5% as expected yesterday in a hawkish decision, says ANZ Economist Dhiraj Nim.
Forecasters’ expectations of NZ inflation fell again in Q3 to 2.03% from 2.33% in Q2. That boosts RBNZ credibility because it’s almost exactly in the midpoint of its 1-3% target range, says ANZ NZ Chief Economist Sharon Zollner.
ANZ FX Analyst Felix Ryan says yesterday’s Bank of Japan summary of opinions from its July meeting indicates its 15 basis point hike to 0.25% was viewed as an adjustment to inflation trends, not a tightening to slow the economy.
Cheers
Bernard
PS: Catch you next week with the Reserve Bank of New Zealand’s August Monetary Policy Statement, and what the markets are viewing as very much a ‘live’ rates decision.
