US markets are flat as weaker new home sales indicate falling demand. FOMC members debate patience vs a July rate cut. Australia’s May inflation is weaker than expected. Japan’s services inflation pressure builds. New Zealand exports jump.
In our deep dive interview, ANZ Economist Krystal Tan reviews how the latest domestic political uncertainty in Thailand, and a process to find a new central bank Governor, could impact the Bank of Thailand’s policy path.
5 things to know in 5 minutes:
The S&P 500 was flat, while oil rose about 1-and-a-half percent as markets took a relative breather overnight. The main economic data was for US new home sales in May, down over 13%, after a 10% lift in April. ANZ Head of G3 Economics Brian Martin says on a trend basis, the US housing market is slowing down.
Brian says demand in the US economy is softening in response to uncertainty, which may push back against the tariff effect on prices. FOMC members continue to debate being patient versus a July rate cut. ANZ Research is picking the FOMC to start easing again from September.
Australia’s May CPI indicator showed an annual rate of 2.1% - below market expectations and down from 2.4% in April. The trimmed mean fell from 2.8% to 2.4% - its lowest since November 2021. ANZ Senior Economist Adelaide Timbrell says this presents some downside risk to ANZ Research’s Q2 CPI forecast of 0.8%.
A summary of the Bank of Japan’s June meeting indicates board members want time to assess the impact of tariffs, says ANZ International Economist Tom Kenny. Meanwhile a stronger-than-expected May Services PPI, at 3.3%, counters views that inflation risks are skewed to the downside.
New Zealand’s annual merchandise trade deficit was just NZ$3.8 billion in May - an improvement of NZ$1.2 billion from April as exports rose 9.7% and imports fell 7.2%. ANZ Economist Miles Workman says strong prices, good growing conditions and a lower Kiwi dollar have all supported exports.
Cheers,
Alex (standing in for Bernard).
PS: Catch you tomorrow with a look at how Australia’s jobs market is performing.
