Global stocks and bonds begin the week on the front foot after more soft US economic data reinforced hopes for a Fed rate cut in Q3. Partial inflation figures in New Zealand are softer than expected. The Bank of Japan surprises by not hiking.
In our bonus deep dive interview, ANZ Head of Asia Research Khoon Goh has surveyed the 11 economies in Asia outside of China and Japan and found seven grew GDP more than expected in the March quarter.
5 things to know:
Global stocks and bonds start this week in a broadly positive mood after last week’s soft US inflation and consumer confidence data strengthened hopes the Fed can start cutting in Q3, says ANZ Senior Rates Strategist Jack Chambers.
New Zealand selected price indices were broadly weaker than expected in May, says ANZ Economist Henry Russell.
Henry says some of the data, including very weak restaurant and ready-to-eat meal prices, will reassure the Reserve Bank of New Zealand, but not enough to change its view that rates can’t be cut until next year.
Manufacturing data out on Friday for New Zealand was also very soft. Henry says the PMI survey for May showed the sector remained in contractionary mode.
The Bank of Japan sat on its hands on Friday, when some had expected a hike and guidance on quantitative tightening. The yen and JGB yields fell as a result, says Jack.
Cheers
Bernard
PS: Catch you in the morning with a full preview of the RBA’s decision due tomorrow afternoon Sydney/Melbourne time.
