The ECB cuts 25 bps as expected, but the Swiss National Bank surprises with 50 bps cut. US headline PPI inflation is hotter than expected, but core inflation is still cooling. Australia’s jobs market tightens as unemployment falls. And India’s inflation rate falls, clearing the way for the RBI to cut in February.
In our bonus deep-dive interview, as we start thinking about what to put on the table for Christmas, ANZ’s executive director for Agribusiness insights Michael Whitehead reveals what Australians eat and drink on Christmas Day.
5 things to know in 5 minutes:
The European Central Bank cut its benchmark deposit rate overnight by 25 basis points to 3%, as expected. ANZ Head of G3 Economics Brian Martin says the ECB lowered its growth and inflation forecasts too, and is set to cut by another 150 basis points in the first half of next year.
US Producer Prices rose 0.4% on a headline basis in November from October, while annual inflation rose to 3.0% from 2.4%. Markets had expected 2.6%. But Brian says core inflation is still cooling. A 50% rise in egg prices because of bird flu was a big factor in faster food price inflation in the headline data.
Australia’s unemployment rate dipped to 3.9% in November, its first time below 4% since March. ANZ Senior Economist Adelaide Timbrell says a range of measures showed the labour market tightening.
Adelaide says the tightening labour market will have caught the Reserve Bank of Australia’s attention after it softened its view on inflation over the past week.
India’s annual inflation fell to 5.5% in November from 6.2% in October, due mostly to lower vegetable prices, which was in line with forecasts. ANZ India Economist Dhiraj Nim sees the Reserve Bank of India still on track to cut in February.
Cheers
Bernard
PS: We’ll be running a short week across Monday, Tuesday and Wednesday next week in the lead up to Christmas. Catch you on Monday as we look ahead to rate decisions from the US Fed, Bank of Japan and Bank of England. We resume in the new year on January 13.
