5 in 5 with ANZ
5 in 5 with ANZ
Monday: Eyes on US PCE for Fed clues
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Monday: Eyes on US PCE for Fed clues

Fed rate cut timing concerns after stronger US PMI; All eyes are on PCE data this week; Aus CPI indicator set to tick up; Yen weakens; ANZ's Zhaopeng Xing on the PBoC's monetary policy shakeup

Markets start the week off the back of concerns on Friday that the US Fed might delay rate cuts after June’s stronger PMI. All eyes are on US PCE data this Friday, and the Yen starts the week on the back foot.

In our bonus deep dive interview, ANZ Senior China Strategist Zhoapeng Xing analyses significant changes on the way for China’s monetary policy regime.

5 things to know:

  1. Global markets start the week with concerns around delays to the Fed’s rate cut timing, after PMI data showed activity in the US expanded at a faster rate in June. All eyes this week will be on Friday’s core PCE inflation data. ANZ Senior Rates Strategist Jack Chambers says monthly core PCE is expected grow 0.1% in May, which would be the lowest this year.

  2. Europe’s PMI showed softer-than-expected growth, with contraction in France linked to the upcoming snap election there. ANZ FX Analyst Felix Ryan says political uncertainty has been a driver for the Swiss Franc rising in recent weeks, ahead of Friday’s surprise interest rate cut by the Swiss National Bank.

  3. In Australia, the focus this week is the May CPI indicator on Wednesday. Jack says it’s expected to tick up slightly to 3.8% annually.

  4. Japan’s annual CPI rose slightly to 2.8% in May, a touch below forecast. That was led by strength in energy and goods prices while the services contribution was steady. Felix says that, while the headline measure rose, core measures did throw up some questions for how the Bank of Japan might read the data.

  5. The Yen slumped further on Friday - with the US dollar rising to 159 against the weaker Japanese currency. Jack says that’s partly due to the Bank of Japan delaying its decision on when to begin quantitative tightening.

Cheers

Alex (standing in for Bernard, who’s on a mid-winter break)

PS: Catch you tomorrow with a look at how the RBA’s hawkish turn last week contrasted with dovishness elsewhere.

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5 in 5 with ANZ
5 in 5 with ANZ
A daily podcast hosted by Bernard Hickey that gives you the five things you need to know about the global economy and markets in under five minutes. Plus a deep dive into emerging trends and issues featuring ANZ's global team of experts.