Global stocks are down after a Walmart warning. Australia’s jobless rate ticks up, but jobs also surge, so the RBA says it’s hard to see bad news in the data. And China holds its key rates, keeping its powder dry so it can cut when the US trade war hits.
In our bonus deep dive interview, ANZ Economist Vicky Xiao Zhou sorted through more than 10,000 product classifications to find out how the 10% tariffs being placed on China by the US would affect trade.
5 things to know in 5 minutes:
US stocks are down, as are US bond yields and the US dollar after Walmart warned consumer spending was weakening. But US jobless claims data suggests the labour market remains robust. which would extend the Fed’s rate-cutting pause into the second half of this year. ANZ’s Head of G3 Economics Brian Martin explains ANZ Research’s change of call for Fed rate cuts, from three cuts over the next six months, to those three cuts being delayed until the six months after September.
Australia’s unemployment rate ticked up to 4.1% in January, while employment rose strongly by 44,000. ANZ Economist Maddy Dunk cites a record high participation rate, as more women entered the labour force.
The RBA’s Deputy Governor says it was hard to see any bad news in the labour market as people look for clues as to whether the RBA can cut rates again.
China held its key one and five year loan prime rates yesterday as expected. ANZ Senior China Strategist Zhaopeng Xing says the authorities don’t want to ease policy too much in the near term, so they have room to move if they need later.
Zhaopeng says that, for now, China’s economy is doing better than it did last year, although with tariffs on the horizon, that could soon change.
Cheers,
Bernard
PS: Catch you next week as we look ahead to Australia’s January inflation data and some key New Zealand confidence readings.
