Global markets are stable after solid US retail sales data. Strong Australian employment growth keeps the spotlight on the RBA ahead of next month’s rates decision. The Bank of Korea unexpectedly holds rates, and New Zealand’s international airfares rise nearly 30% in December.
In our bonus deep dive interview, ANZ Head of Australian Economics Adam Boyton previews 2025 for the Australian economy.
5 things to know in 5 minutes:
Global stocks and bonds held on to their gains from soft US inflation data earlier in the week, thanks to also-benign retail sale figures overnight. Meanwhile, Australia’s unemployment rate rose slightly to 4% in December, as expected, but with stronger-than-forecast jobs growth of 56,000. ANZ Senior Economist Adelaide Timbrell points to a record high participation rate as a key factor.
Market expectations for a February rate cut by the Reserve Bank of Australia fell from 70% to about two-thirds after the stronger employment figures. Adelaide says the RBA will balance the jobs data against signs inflation is also easing.
South Korea’s central bank held rates at 3% yesterday, despite expectations for a cut. ANZ Economist Krystal Tan says the Bank of Korea shifted its focus to a weakening currency and its potential to increase inflation.
GDP data from China today will reveal whether 2024’s 5% growth target will be met. ANZ Senior China Strategist Zhaopeng Xing says his forecast for Q4 growth of 5.3% from Q4 of 2024 should be enough to round up calendar 2024 growth to 5%.
International airfares from New Zealand rose 29.6% in December from November, partial inflation data for the month showed yesterday. ANZ Senior Economist Miles Workman says the data prompted ANZ Research to lift its Q4 CPI forecast.
Cheers,
Bernard
PS: Catch you next week with a look ahead to the Bank of Japan’s rate decision on Friday.
