US stocks rise after Donald Trump de-escalates tensions over Greenland, but the US dollar falls again, driving the Aussie and Kiwi dollars to 3-month highs. Australian unemployment unexpectedly drops, bolstering views the next RBA move is a hike.
In our Deep-Dive interview, ANZ’s Head of Geopolitical Risk Cameron Mitchell says a useful way to analyse an extraordinary few weeks in global politics is to identify the contests to focus on, and then the corridors that transmit their risks into the global economy.
5 things to know in 5 minutes:
US stocks and bonds firmed overnight after a softening of Donald Trump’s rhetoric over Greenland, for now. Delayed US Personal Consumption Expenditure data for October and November showed core inflation at 2.8% in November, in line with expectations. ANZ Economist in London Henry Russell says it confirms the Fed is likely to hold next week, and start cutting again in March.
Australia’s unemployment rate unexpectedly dropped from 4.3% to 4.1% in December. ANZ Economist Aaron Luk says it was almost entirely driven by a sharp drop in the volatile youth unemployment rate. He says things look tight for the RBA, but ANZ Research continues to pick a hold in February.
New Zealand’s housing market had a steady end to the year with prices rising 0.2% in December to be down just 0.1% from a year ago, according to Real Estate Institute data. ANZ Senior Economist Matthew Galt says 2026 might also see only fairly modest movement as well.
New Zealand’s December quarter inflation data will be out later today. ANZ Senior Economist Miles Workman is picking a 0.5% quarterly rate, and for the annual rate to be unchanged at 3%. That’s right at the top of the Reserve Bank’s target band - with the central bank forecasting a 2.7% result.
South Korea’s economy underperformed in the December quarter, contracting 0.3% from September, according to preliminary data. ANZ Economist Krystal Tan says the drop was payback after a strong Q3 boosted by a supplementary Government budget.
Cheers,
Bernard.
Catch you next week with Australian inflation data and a Fed rate decision.
