There’s more conflicting news from the Middle East, with ongoing fighting in Lebanon, but hope for a deal drags oil prices down. The yen is perched on its precipice of 160 to the US dollar. And the Reserve Bank of India may hike today to support the rupee.
In our deep-dive interview, ANZ’s Head of Asia Research Khoon Goh looks what what is behind the Korean won falling to its lowest level since 2009.
5 things to know in 5 minutes:
The yen is perched right on the precipice of 160 to the US dollar this morning, which is seen as the level Japanese authorities intervene to stop the currency falling any further. ANZ’s Head of G3 Economics Brian Martin says expectations the Bank of Japan will hike its key rate in 11 days time are helping to hold it up. Just.
Australia’s merchandise trade balance returned to a surplus in April after a small deficit in March, as export values recovered. ANZ Economist Sophia Angala says resources exports provided the support, while oil import prices remained high.
ANZ-Roy Morgan Australian Consumer Confidence improved last week to its highest level since early March. Sophia says the lift came as the weekly inflation expectations measure softened to 5.9%.
A day after news of ongoing strength in New Zealand building consents, data showed residential and non-residential building activity declined 3.5% in the March quarter. ANZ Senior Economist Matt Galt says that may help lower his quarterly GDP forecast of 0.9% as new data arrives.
The Reserve Bank of India (RBI) has a rate decision today. ANZ Research has a minority view for a 25 basis point rate hike, given the backdrop of inflation pressures and a weakening currency. Reports yesterday suggested India may lower capital gains tax for foreign investors to encourage inflows and boost the rupee. ANZ Economist Dhiraj Nim says a combination of moves is required to support the currency.
Cheers,
Bernard.
PS: Catch you next week with reaction to that RBI rate decision.
