The US 10-year Treasury bond yield nudged 5% this morning after Jerome Powell reaffirmed the Fed saw higher bond yields as useful in fighting inflation.
In our bonus deep-dive interview, ANZ’s Senior Asia Strategist Zhaopeng Xing points to the ‘lipstick effect’ that held back retail sales during China’s Golden Week.
5 things to know
The US 10-year Treasury yield spiked 9 bps to 4.996% shortly after US Federal Reserve Chair Jerome Powell said: “Financial conditions have tightened significantly in recent months, and longer-term bond yields have been an important driving factor in this tightening.” It edged down to 4.94% by 5 am AEST.
The US 2-year Treasury yield fell 3 bps to 5.18% as Powell indicated the key Fed rate could be held for now. The US$ fell too. The A$ and NZ$ bounced off lows in early trade against the weaker US$.
Australian jobs growth was softer than expected in September, but the labour market remains too tight to change the RBA’s view, ANZ Australia Senior Economist Catherine Birch says.
ANZ Economist Maddy Dunk says NAB’s business survey also shows Australia’s labour market is still constrained.
Bank Indonesia surprised markets by hiking its key policy rate 25 bps to 6.0% late yesterday to support a rupiah near three-and-a-half year lows1, writes ANZ Economist Krystal Tan.
Cheers
Bernard
PS: Have a great weekend. Look out on Monday for a preview of next week’s inflation data in Australia.
FYI. Audio file updated at 7.20 am AEST to remove repeated phrase.
