The US dollar has spiked up over 158 yen. Traders are on high alert for intervention by Japanese authorities. Market expectations for rate cuts by the Fed and RBA keep being pushed out. New Zealand consumer confidence falls again.
In our bonus deep dive interview, ANZ Head of Australian Economics Adam Boyton looks at why Australian consumer confidence is at 1990s-style recession-level lows, and when it might pick up.
5 things to know:
The US dollar spiked nearly 2% late on Friday to over 158 yen after the Bank of Japan held its key policy rate and disappointed traders expecting some sort of tightening signal. Traders are on high alert for intervention today, says ANZ Group Chief Economist Richard Yetsenga.
ANZ Head of FX Research Mahjabeen Zaman says the yen may stabilise in the low 150s if there is intervention, but ultimately the path for US inflation, interest rates and the US dollar will move Japan’s currency around.
Richard explains how a mid-cycle slowdown has disrupted correlations between central bank moves, creating an uncomfortable place between rate cut heaven and rate cut hell.
Richard says the RBA was always likely to hold rates at contractionary levels for an extended period to get inflation back to its target.
New Zealand consumer confidence has fallen to near its lows hit during the 2008/09 Global Financial Crisis because of high inflation, says ANZ Senior Economist Miles Workman.
Cheers
Bernard
PS: Catch you tomorrow with a closer look at New Zealand’s key jobs figures due on Wednesday.
