Global bond and stock markets are rallying this morning, despite attempts yesterday by Fed chair Jerome Powell to downplay chances of a rate cut in March.
In our bonus deep-dive interview, ANZ Economist Dhiraj Nim details a key reason for India’s economic outperformance — Government investment at 20-year highs in its budget overnight.
5 things to know
US bond yields fell sharply overnight on expectations the Fed might have to cut earlier to take pressure off banks hit by losses in US commercial property. Two small banks reported big losses and slumped on stock markets this week, as ANZ Head of FX Research Mahjabeen Zaman points out.
US Federal Reserve Chair Jerome Powell pushed back against market expectations of a March cut in the Fed Funds Rate, saying it was unlikely.
Mahjabeen says there is plenty of fresh data to come before the Fed’s decision in March, leaving time for the gap between market views and the Fed’s view to close. Markets still see a 40% chance of a cut in March.
Fashion and outdoor equipment spending in Australia was hit hardest in January, says ANZ Economist Maddy Dunk.
Growth in the Philippines in Q4 slowed, but by less than expected, after private consumption firmed, says ANZ Economist Debalika Sarkar.
Cheers
Bernard
PS: Catch you on Monday with the latest from US Non Farm Payrolls figures tonight, which are expected to show growth in January of around 184,000, down from 216,000 in December.
