US stocks jump on tech earnings, but a new US manufacturing survey points to rising chances of a US recession. The Bank of Japan holds dovishly, which drives the yen down. Australia’s exports jump in March pre-tariffs, while Korea’s exports fall in April.
In our bonus Deep Dive interview ANZ New Zealand Chief Economist Sharon Zollner looks at the prospects of lower business confidence feeding into the Reserve Bank of New Zealand’s rate cut projections.
5 things to know in 5 minutes:
US stocks are up 1-2% this morning after strong results from Microsoft and Meta. But a fresh US manufacturing survey out overnight shows more softness in orders, particularly for exports. ANZ Head of G3 Economics Brian Martin says he now sees a 40% chance of a US recession.
The Bank of Japan held dovishly yesterday, pushing the prospects for another rate hike even further out. The US dollar rose 1.9% to 145.59 yen. ANZ Senior International Economist Tom Kenny says the BoJ may not hike again until late this year, or even next year.
Signs of the effects of the US tariffs are starting to show through in global trade data. South Korea reported exports - adjusted for working days - fell nearly 1% from a year ago, as shipments to the US fell 6.8%. Meanwhile, Australian exports jumped 7.6% in March, thanks to higher coal, iron ore and gold exports, says ANZ Economist Maddy Dunk.
Maddy says all eyes are now on April data released at the start of next month, to see if there is a shift for Australian exports towards other trading partners, such as China.
Amid US data released this week, annual core PCE inflation - the Federal Reserve’s preferred price measure - fell to 2.6% in March from 3% in February. Brian sees inflation on a downward slope.
Cheers,
Bernard
PS: Catch you next week with a look ahead to the FOMC’s Thursday US rates decision and detail on tonight’s US jobs figures.
