Bond markets rallied overnight on renewed hope for a US soft landing and confirmation the ECB has stopped raising rates. US stocks are down on a few poor earnings results.
In our bonus deep-dive interview, ANZ’s Head of G3 Economics Brian Martin explains why US Government stimulus is getting more traction this time around.
5 things to know
US economic growth beat expectations, but core inflation measures were subdued, encouraging bond investors to push yields lower. The US 10-year yield fell 10 bps to 4.84% by 5 am AEST. The Nasdaq fell 2% after poorly-received Meta earnings. The S&P 500 fell 1% after a UPS sales warning.
US GDP rose at an annual rate of 4.9% in Q3, which was above forecasts for around 4.5%. Brian Martin points to strong consumption growth, but notes signs the economy is slowing in line with the Fed’s hopes.
The ECB held its official rates for the first time in 11 meetings, as expected, and is now likely to hold until well into next year, Brian says.
South Korean GDP growth of 0.6% in Q3 was more resilient than expected and supports the Bank of Korea’s currently hawkish view, says ANZ Asia Economist Krystal Tan.
All eyes in Asian trade today will be on the yen, which is through the intervention red line of 150 yen/$.
Cheers
Bernard
PS: Have a great weekend1. Look out on Monday for our preview of the week ahead, which will include a Fed decision and US non farm payrolls data.
Especially all the Rugby Union fans! Congratulations to the All Blacks and commiserations to the Springboks. I so hope this footnote ages well and doesn’t jinx the ABs.
