US markets bounce after Donald Trump’s tax bill passed in the House, just. New Zealand’s Government smooths its bond issuance out. Japanese business confidence falls. Singapore warns of a technical recession, and low Malaysian inflation could support a mid-year rate cut.
In our deep-dive interview, ANZ Senior Economist Miles Workman says the New Zealand Budget should only have a limited impact on the Reserve Bank of New Zealand’s rate cut thinking.
5 things to know in 5 minutes:
US stocks are up around 0.5% and the US 10 year Treasury bond has rallied five basis points down to 4.55% by 4am Sydney/Melbourne time, on some relief the House of Representatives in the Congress passed Donald Trump’s tax bill. But ANZ Head of G3 Economics Brian Martin says there’s still plenty of water left to go under America’s budget bridge, which bond markets revolted at in recent days.
New Zealand’s Government delivered an annual Budget which saw a wafer-thin surplus continuing to be forecast in the 2028/29 year and net debt peaking at a similar level to forecasts in December. ANZ Senior Economist Miles Workman says there wasn’t much change to bond issuance projections from December.
In Japan, a fall in the composite PMI to a contractionary 49.8 was led by the services sector in April. ANZ FX Analyst Felix Ryan says the report’s private sector business confidence reading was its second lowest since 2020.
Singapore’s final estimate for Q1 GDP was revised up slightly from negative 0.8% to negative 0.6% due to firmer services activity. The Ministry for Trade and Industry warned of further negative growth in Q2, triggering a technical recession, but ANZ Head of Asia Research Khoon Goh says that’s unlikely.
Annual inflation in Malaysia was steady at a four-year low of 1.4% in April. ANZ Economist Arindam Chakraborty says the four-year low in price growth could support Bank Negara Malaysia to cut rates from their current 3%.
Cheers,
Bernard
PS: Catch you next week with more on the global market’s approach to fast-rising US Government bond issuance.
