US bond yields rose and US stocks fell overnight after robust US growth figures reinforced views the Fed won’t cut rates much. So the US dollar rose, and the Aussie and Kiwi dollars fell. And Australian job ads drop.
In our Deep-Dive interview ANZ Senior Economist Miles Workman reviews the New Zealand Treasury’s long-term outlook for Government spending released this week.
5 things to know in 5 minutes:
Final GDP figures showed the US economy grew at an annualised pace of 3.8% in the June quarter. That was faster than expected, the fastest growth in two years and more than the 3.3% initially estimated. ANZ Economist Bansi Madhavani says this more robust data supports views from some at the Fed that only gradual cuts in the Fed Funds Rate are needed.
Attention now turns to PCE inflation data for August due later tonight. That’s the Federal Reserve’s preferred measure for inflation in the US. Bansi sees headline inflation rising 0.3%, but core inflation at 0.2%.
Australian job vacancies fell 2.7% in the three months to August, as traders looked for signs that the RBA would be able to cut rates again following stronger inflation last month. ANZ Economist Aaron Luk says there was weakness in the private sector.
Aaron says the release showed some signs of pressure coming off the labour market, which is something the Reserve Bank of Australia would be taking note of.
The Bank of Japan’s July board minutes showed that, while policy makers voted to hold rates, several of them pointed to a desire to keep normalising policy in the future, notes ANZ FX Analyst Felix Ryan.
Cheers,
Bernard.
PS: Catch you next week with a review of tonight’s PCE inflation data in the US.
