Donald Trump cuts tariffs on beef, coffee and bananas to soften inflation concerns evident in recent election losses. China’s factory expansion slows as investment drops, and UK bond markets sell off on Budget deficit worries.
In our Deep-Dive interview, ANZ Group Chief Economist Richard Yetsenga puts a huge year for China’s economy in perspective after a visit to China.
5 things to know in 5 minutes:
Donald Trump has relented on some of his tariff hikes. Late on Friday he announced cuts to reciprocal tariff rates on beef, coffee, tea, bananas, oranges, tomatoes and cocoa. ANZ Group Chief Economist Richard Yetsenga says it’s a significant move in reaction to voter concerns about inflation.
Economic data from China on Friday was weaker than expected, with industrial production October up 4.9% from a year ago, slowing from 6% growth the previous month. Fixed asset investment dropped 1.7% in October, the worst result in five years. However, retail sales growth of 2.9% was resilient and ANZ’s Senior China Strategist Zhaopeng Xing notes a few technical factors.
The UK bond or gilt markets sold off aggressively on Friday night after the Government confirmed it had abandoned plans to increase income tax to reduce deficits and borrowing.
Richard says the UK bond market slump is symptomatic of investor concerns about fiscal situations elsewhere, including France and the United States.
There was some good news from New Zealand’s manufacturing sector on Friday, with the BusinessNZ-BNZ PMI survey showing a fourth consecutive month of expansion for only the second time in three years. ANZ Senior Economist Matt Galt also notes the highest expansion in new orders in three years.
Cheers,
Bernard.
PS: Catch you tomorrow with a closer look at why aluminium prices are rising, including the link to the AI-driven boom in data centre construction and electricity use.
