5 in 5 with ANZ
5 in 5 with ANZ
Monday: Fed talk boosts US$ over 146 yen
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Monday: Fed talk boosts US$ over 146 yen

Powell says inflation too high so Fed may have to hike; US 2-yr Treasury hits 5.07%; US$ up to near-15-year high of 146.5 yen; Eyes on BoJ; Sydney CBD spend drops less than Canberra, Darwin post-Covid

The US$ is strong above 146.4 yen after the Fed warned inflation was still too high and it may have to hike again. Traders are on high alert for BoJ intervention.

In our bonus deep-dive interview, ANZ Group’s Chief Economist Richard Yetsenga looks beyond cyclical inflation to where structural inflation is stronger.

5 things to know

  1. Jerome Powell said US inflation was too high and may force the Fed to hike again. The US 2-yr T-bond rose to 5.07% and the US$ rose to over 146, a key level the Bank of Japan intervened at before.

  2. ECB President Christine Lagarde also talked tough at Jackson Hole about inflation, and structural inflation in particular. ANZ’s Head of G3 Economics Brian Martin says underlying inflation is the Fed’s main problem.

  3. ANZ Australia Economist Maddy Dunk says state CBD spending is down and remains below pre-Covid levels, but the fall is less in Sydney and Melbourne, where big office employers have called workers back.

  4. China’s property sector consumes 37% of China’s steel and its downturn will hit demand, ANZ’s Senior Commodity Strategist Daniel Hynes says.

  5. Australian markets will watch for retail trade data later on Monday and CPI inflation data on Wednesday.

Cheers

Bernard

PS: Look out for a deep-dive tomorrow on how the RBA might accelerate the unwinding of its Quantitative Easing during Covid lockdowns.

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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.