Markets are on yen intervention alert. Australian inflation data was a bit softer than expected. The Taylor Swift effect was less than economists forecast. China’s factory profits beat forecasts. NZ’s Government is set to borrow more as the economy slows.
In our bonus deep dive interview, ANZ Pacific Economist Kishti Sen explains why Papua New Guinea’s depreciating currency, the kina, is not driving structural change.
5 things to know:
Traders are on high alert for yen intervention after officials said overnight they held an emergency meeting about the yen hitting a 34-year low of 151.97. It bounced to 151.38 by 5 am Sydney/Melbourne time. ANZ Head of FX Research Mahjabeen Zaman says officials worry more about volatility than red lines.
Australian inflation was a bit softer than expected at 3.4% in February vs a year ago. ANZ Economist Maddy Dunk says that’s consistent with ANZ’s Q1 inflation forecast of 0.5%, versus the RBA’s 0.8%, but domestic inflation remains sticky.
Maddy says the data showed the ‘Taylor Swift effect’ was overplayed as lower demand from fewer school holiday travellers in February offset hotel inflation from The Eras Tour concerts in Sydney and Melbourne.
China’s industrial profits beat forecasts, rising 10.2% in January and February vs a year ago. ANZ Senior China Strategist Zhaopeng Xing says exports helped, but more stimulus may be needed for China to hit its 5% GDP growth target.
New Zealand’s Budget Policy Statement gave off mixed signals ahead of the full Budget on May 30, ANZ Senior Economist Miles Workman says. Treasury forecast a $14bn lower tax take, but key details will be known on May 30.
Cheers
Bernard
PS: Catch you next on Tuesday, after the Easter break, with reactions to the US core PCE price index data.
