Soft US data has lifted bets for Fed rate cuts this year ahead of May’s PCE inflation print today. There’s good news on inflation pressures in New Zealand. The Philippines central bank holds rates, but looks to pull its easing cycle forward.
In our bonus deep dive interview, ANZ Chief Economist for Greater China Raymond Yeung explains why Chinese authorities are pushing for the RMB to become a global reserve currency.
5 things to know:
US final Q1 GDP data was softer overnight, supporting hopes the Fed can cut rates from September. Now all eyes are on core PCE inflation tonight. ANZ Head of G3 Economics Brian Martin is expecting a monthly core print of 0.1% in May and a flat headline rate, indicating a gradual resumption in disinflation.
The Philippines central bank held rates at 6.5% yesterday, as expected. ANZ Economist Arindam Chakraborty says the key news was the BSP reducing its inflation forecasts, potentially bringing its easing cycle forward.
The ANZ Business Outlook index fell again in June, with a large drop in pricing intentions. ANZ New Zealand Chief Economist Sharon Zollner says that’s good news for the Reserve Bank of New Zealand.
Sharon says New Zealand consumers are also more wary. ANZ Roy Morgan consumer confidence dipped again in June.
Australian job vacancies fell 2.7% in the three months to May, to be down over 17% annually. ANZ Senior Economist Blair Chapman says vacancies are still elevated compared to pre-COVID levels.
Cheers
Alex (standing in for Bernard, who’s on a mid-winter break this week)
PS: Catch you next week with key US jobs data and what that might mean for when the Fed can start cutting rates.
