US consumers are in a mood to spend, which is seen backing the Fed Chair’s caution on rate cuts. New Zealand consumers are a bit more confident about their current finances, but not so confident about future house prices.
In our Deep-Dive interview, ANZ Head of FX Strategy Mahjabeen Zaman explains how Aussie pension funds dealt with an apparent breakdown earlier this year in the traditional link between the Aussie dollar and global risk assets.
5 things to know in 5 minutes:
US stocks closed slightly higher and US bond yields were largely unchanged on Friday night after US personal consumption expenditure data, which is the Fed’s preferred measure, showed core inflation was 0.2% in the month of July and 2.9%, which was unchanged from a year ago. However, ANZ Senior Rates Strategist Jack Chambers says the Fed will have noticed robust consumer spending in the figures.
Jack says that robust consumer spending ties in with cautionary comments last week by Fed Chair Jerome Powell about the inflationary risks still hanging around.
Markets will be focused this week on US non-farm payrolls for September on Friday night. Markets expecting monthly jobs growth of around 43,000 and an unchanged unemployment rate at 4.3%.
The ANZ Roy Morgan survey of consumer confidence in New Zealand in September showed a slight improvement overall, says ANZ NZ Chief Economist Sharon Zollner.
However, Sharon also says expectations about annual house price inflation dropped from 3% to 2.5% in the month.
Cheers,
Bernard.
PS: Catch you with a preview of the Reserve Bank of Australia’s cash rate decision tomorrow, with markets now seeing it being held.
