US stocks fell and US Treasury yields rose after US growth and inflation data was worse than expected. Australia’s strong CPI could shift the RBA’s rate cut track out. Indonesia hikes rates to bolster its currency and South Korea’s GDP beats forecasts.
In our bonus deep dive interview, ANZ Chief Economist for Southeast Asia and India, Sanjay Mathur looks at what central banks across Asia face in terms of monetary policy and their currencies if the US Fed delays rate cuts.
5 things to know:
US 2-year Treasury yields rose 7bps to 5.0% after inflation figures in US GDP data were higher than expected. Markets will now watch PCE inflation figures that the Fed prefers, says ANZ Head of G3 Economics Brian Martin. They’re due tonight.
Australia’s annual CPI was slightly stronger than expected. ANZ Senior Economist Catherine Birch says the RBA will want to see non-tradables and services inflation slow considerably in the June quarter to keep confidence that it can start cutting in November.
South Korea’s quarterly GDP growth of 1.3% beat forecasts. ANZ Economist Krystal Tan says the growth was led by exports and construction.
Malaysia’s CPI inflation rate was 1.8% in the year to March, the same as in February, and below the consensus forecast for a 2% rise.
Indonesia has become the first victim of growing expectations that the US Federal Reserve will hold interest rates higher for longer. Bank Indonesia hiked its key policy rate to support its currency yesterday.
Cheers
Bernard
PS: Catch you next week with a deep dive into why Australian consumer confidence is so low, and what this could mean for the RBA.
