US inflation rises in June, driving down expectations for a Fed rate cut next month. Trump announces a string of trade deals and extensions, but not for India. And the Bank of Japan holds, but sees higher inflation.
In our deep dive interview, ANZ’s Dhiraj Nim looks at how the lack of a US trade deal for India, with a penalty tariff rate of 25%, will affect its economy.
5 things to know in 5 minutes:
US PCE inflation rose to 0.3% in June from an upwardly revised 0.2% in May as tariff-related price increases started flowing through. Markets reacted by reducing their expectations the Fed will cut next month. The key now is US non-farm payrolls data tonight, says ANZ economist in London Bansi Madhavani.
The Bank of Japan held rates at 0.5% yesterday as expected. ANZ FX Analyst Felix Ryan says the BoJ lifted its short-term inflation forecasts, although there was a question of what that meant for policy.
China’s official manufacturing Purchasing Managers’ Index contracted in July by more than expected, at 49.3. But ANZ Chief Economist for Greater China Raymond Yeung says there was some positive news in the survey about prices.
Australian retail sales surged 1.2% in Q2 after a 0.5% rise in Q1. Meanwhile, dwelling consents lifted 11.9%. Private credit data for June was also strong, says ANZ Economist Maddy Dunk.
South Korea secured a US trade deal with ‘only’ a 15% tariff - including on cars. ANZ Economist Krystal Tan says avoiding what could have been a 25% auto tariff is critical.
Cheers,
Bernard.
PS: Catch you next week analysis of China’s latest Politburo meeting.
