The ECB hiked overnight, but it lowered its growth and inflation forecasts, and signalled it would stop there, so stocks and bonds rallied.
In our bonus deep-dive interview, ANZ’s Head of Asia Research Khoon Goh reveals how the PBoC used most of its toolkit to defend the yuan/renminbi (CNH), but still has one very big bazooka left.
5 things to know
The ECB hiked its deposit rate by 25 basis points to a record high 4% and signalled a pause. ANZ’s Head of G3 Economics Brian Martin says markets saw it as a dovish hike. The Eurostoxx 600 rose 1.5%. German bond yields initially fell.
The market’s focus now turns to rates decisions by the Fed and the BoE next week. Brian sees the Fed holding, but says the BoE should hike to beat inflation down.
Australian unemployment was steady at 3.7% in August. The surprise was a 64,900 rise in jobs. ANZ’s Head of Australian Economics Adam Boyton unpacks the devil in the detail.
Brent rose another 2% to almost US$94/bbl. Extended oil production cuts by Saudi Arabia and Russia are the main drivers, ANZ’s Senior Commodities Strategist Daniel Hynes says.
ANZ’s Senior China Economist Betty Wang says China retail sales, industrial production and investment data due today may be better than many expect.
Cheers
Bernard
PS: Have a great weekend. Look out next week for deep dive interviews on future oil demand with Daniel Hynes, and go behind Queensland’s particularly strong economic growth with Richard Yetsenga.
