The US dollar jumps after Trump says 25% tariffs will hit Canadian and Mexican imports from next Tuesday. New Zealand business confidence nudges up as interest rates fall, and weaker Australian capital expenditure may lower Q4 GDP forecasts.
In our bonus deep dive interview, ANZ Economist Maddy Dunk looks at how much the RBA’s rate cut last week might feed through to Australia’s housing market this year.
5 things to know in 5 minutes:
The US dollar rose 0.7% overnight after Donald Trump confirmed 25% tariffs would apply to Mexican and Canadian imports from March 4. Eyes now turn to US PCE data tonight. ANZ Head of G3 Economics Brian Martin says tariffs may make inflation’s eventual fall stickier.
ANZ’s New Zealand Business Outlook for February showed headline confidence rose four points to +58, but ANZ Economist Sharon Zollner says the situation remains mixed for an economy only now pulling out of recession.
Sharon says there was generally good news for the Reserve Bank of New Zealand in the survey’s price and cost gauges.
Australian private new capital expenditure fell by 0.2% in Q4 vs the market consensus for a rise of 0.5%. ANZ Senior Economist Adelaide Timbrell says the important GDP component of machinery and capital expenditure fell 0.8%.
Adelaide says there was also a weak start to 2025/26 capital expenditure plans, which were up only 2% from the current financial year, which increases the chances for a lower Q4 GDP forecast.
Cheers,
Bernard
PS: Catch you next week with analysis of what tonight’s January PCE inflation data could mean for US interest rates.
