US bond yields and the USD rise again on strong factory data. Australian unemployment rises, but firms still expect labour market tightness. Next week’s CPI could be crucial for the RBA. Japan’s inflation rate is forecast to slow. but don’t expect the BoJ to budge.
In our bonus deep dive interview, ANZ Economist Dhiraj Nim explains what is driving a surge in capital investment in India, and whether it can continue to drive GDP growth.
5 things to know:
The Philadelphia manufacturing index improved to its highest level since April 2022, which ANZ Head of G3 Economics Brian Martin says is encouraging and shows the US manufacturing weakness of the last two years has now passed. It tallies with the Fed’s high-for-longer view on interest rates, he says.
Australia’s unemployment rate rose from 3.7% to 3.8% in March, in line with expectations, while employment fell 6,600. ANZ Senior Economist Blair Chapman says the jobs fall was within a wide range of expectations, and that yesterday’s read was ‘not too hot, not too cold’.
Australian businesses are still expecting the labour market to remain tight, according to the NAB’s March quarter business confidence survey.
Blair says the unemployment rate will need to rise a bit faster in the June quarter to reach the Reserve Bank of Australia’s forecasts.
Japan releases its March CPI this morning. ANZ Head of FX Research Mahjabeen Zaman expects the annual headline rate to stay steady around 2.8%, which is still above the Bank of Japan’s 2% target.
Cheers
Bernard
PS: Catch you next week with US GDP, Australia CPI and a Bank of Japan monetary policy meeting.
