Comments from Japanese officials suggesting a rate hike jolted the yen and Japanese bond yields sharply higher overnight. Global markets are now focused on Non Farm Payrolls data tonight for signs of a soft US landing.
In our bonus deep-dive interview, ANZ’s Head of G3 Economics Brian Martin explains why the Fed’s next rate cutting cycle will be so different to previous ones.
5 things to know
The yen jumped 2% overnight to 143.9/US$ and the 10-year JGB yield rose 10 basis points to 0.75% because of renewed speculation the Bank of Japan could hike its main policy rate back to 0%, possibly as early as December 19.
ANZ NZ Chief Economist Sharon Zollner says market expectations of rate cuts next year are well ahead of what the RBNZ expects.
She says the RBNZ & RBA may be talking so hawkishly against those expectations because both have long summer breaks before their next decisions.
ANZ Australia Economist Maddy Dunk points to strong car imports in October to show some consumers are still buying big-ticket items.
Brian says a US jobs growth figure over 200,000 tonight could unsettle market confidence about a soft US landing.
Cheers
Bernard
PS: Look out on Monday for analysis of tonight’s US jobs data.
