Markets are mixed as they digest a US court ruling that the Trump administration’s tariffs were imposed illegally. Australian business indicators were a mixed bag in Q1. The Reserve Bank of New Zealand Governor says a July cut is not a done deal. The Bank of Korea cuts, with more to come.
In part two of a Deep Dive interview into Singapore’s new safe-have status, ANZ’s Head of Asia Research Khoon Goh explains how the city-state avoids being labelled a currency manipulator by the United States.
5 things to know in 5 minutes:
US markets were mixed overnight, after the US Court of International Trade ruled that most of the Trump administration’s recent tariffs were illegal - due to use of the International Emergency Economic Powers Act to justify their imposition. However, as ANZ Economist Bansi Madhavani explains from London, the administration will appeal the ruling, and is looking for other avenues.
US Q1 GDP was revised from an initial 0.3% annual fall to a contraction of 0.2%. Bansi says that, while consumer spending was revised lower - from 1.8% to 1.2%, stronger investment offset that weakness.
In Australia, business investment data was a mixed bag for the first quarter, according to ANZ Senior Economist Adelaide Timbrell. Private capital expenditure fell 0.1% compared to market expectations for a 0.5% lift. Capex plans for 2025/26 were also weak. On the positive side, private construction activity rose 1.7%, with non-residential work up 3%.
Reserve Bank of New Zealand Acting Governor Christian Hawkesby has said a rate cut in July is not a done deal. Meanwhile, headline business confidence tumbled 12 points in May, to +37, according ANZ’s Business Outlook. ANZ New Zealand Chief Economist Sharon Zollner says there were positive movements as the month went on though, for profit expectations in particular.
The Bank of Korea cut its policy rate 25 basis point to 2.5% yesterday, citing the impact of US tariffs. ANZ Economist Krystal Tan says while that was expected, the surprise came in how low the central bank cut its growth forecast for 2025.
Cheers,
Alex (standing in for Bernard, who is on holiday through June).
PS: Catch you next week with analysis of Australian retail sales and the latest New Zealand consumer confidence data.
