The European Central Bank cuts by 25 basis points as inflation falls below target. US rate cut bets are pulled back following stronger retail sales. Australian jobs growth surges, and China announces further measures to support its property market.
In our bonus Deep Dive interview, ANZ Economist Maddy Dunk looks at the effects that changing household sizes and investor lending are having on Australia’s housing market.
5 things to know:
The European Central Bank cut its key deposit rate by another 25 bps to 3.25% overnight, aided by inflation falling to 1.7% year-on-year in September, which was below its target. ANZ Head of G3 Economics Brian Martin says lower interest rates will help reduce Europe’s high savings rates and support growth.
US retail sales beat estimates in September, rising 0.4%. US Treasury yields rose as traders viewed the strength as a sign the US Fed will keep rates high for longer. Markets are now pricing in just below 50 bps of cuts across November and December. Brian says the numbers suggest the Fed will move cautiously.
Australia’s unemployment rate was flat at a revised 4.1% in September. That came as employment surged by 64,000. ANZ Economist Maddy Dunk says employment growth has averaged 45,000 over the past six months.
Maddy says the numbers are a testament to the resilience of the Australian economy and point to rate cuts by the RBA being some way off. ANZ Research continues to predict a February 2025 start to easing.
Traders were disappointed yesterday by China’s Housing Ministry’s policy moves to spur completion of unfinished projects and renovate homes in run-down areas. ANZ Chief Economist for Greater China Raymond Yeung says the announcement was less ‘economic stimulus’ than expected by the market, and more about preventing a further property slump.
Cheers
Alex
PS: Bernard is away this week on family leave. Catch you next week with further analysis of China’s property market support.
