Weak US jobs data strengthens bets the Fed will cut later this month. Australia’s economy grows faster than expected. And there’s an export boost for South Korea.
In our Deep Dive interview, ANZ’s Senior Economist Adelaide Timbrell analyses Australia’s stronger-than-expected Q2 growth.
5 things to know in 5 minutes:
US rate cut bets were boosted by weak job openings data overnight. JOLTS job openings fell to 7.18 million in July from 7.36 million in June. ANZ Economist Bansi Madhavani says this supports a 25 basis point rate cut by the Fed in September, as Fed officials start to prepare for their decision.
Bansi says global bond volatility continued overnight, particularly for long-dated bonds. A focus this week has been UK 30-year gilts hitting their highest since 1998, although they were down slightly overnight at 5.595%.
Australia’s economy grew a better-than-expected 0.6% in Q2, due to higher household consumption. Annual growth of 1.8% was the fastest in nearly two years. The boost saw traders pull back their November rate cut bets slightly. ANZ Senior Economist Adelaide Timbrell still expects a 25bps cut.
South Korea’s economy grew faster in the second quarter than initially thought, at 0.7% versus 0.6%, says ANZ Economist Krystal Tan.
Krystal says the revision comes as the Bank of Korea is already expecting a small pick-up in growth, and that it shouldn’t stop another rate cut as long as house prices stabilise.
Cheers,
Bernard.
PS: Catch you tomorrow with analysis of Australia’s imports and exports in July.
