The Fed has just cut its key policy rate by 25 basis points, as expected, and says it will end its Quantitative Tightening (QT) from December 1. The Reserve Bank of Australia looks set to hold next month after strong inflation data.
In our Deep-Dive interview, ANZ Commodities Strategist Soni Kumari looks ahead to today’s meeting between President Trump of the US and President Xi of China, and analyses how metals markets may react to any trade deal.
5 things to know in 5 minutes:
The Fed has just cut its key interest rate by 25 basis points to a range of 3.75% to 4%, as expected, citing a slowing jobs market. It also announced it will end its programme of Quantitative Tightening (QT), which is the selling of bonds from its stockpile built up during Covid by Quantitative Easing (QE), which is bond buying. It’s stockpile is still worth well over US$6 trillion, albeit down by US$2 trillion since starting QT in 2022. It will end QT from December 1.
The Reserve of Australia is set to keep rates firmly on hold at next month’s meeting, after quarterly trimmed mean inflation of 1% beat expectations in the third quarter, says ANZ Senior Economist Adelaide Timbrell.
The annual headline rate rose to 3.2% - above the Reserve Bank of Australia’s 2-3% target band. Adelaide says that shouldn’t worry the RBA too much as it is set to dip back down in coming quarters.
Global market attention now turns to two key central bank meetings today. First is the Bank of Japan. ANZ International Economist Tom Kenny expects rates to stay on hold, but with two dissenting votes wanting a hike. Tom says the election of a dovish new Prime Minister shouldn’t affect the call.
The European Central Bank also has a rates decision overnight. ANZ Economist Bansi Madhavani expects the ECB to hold rates, but maintain an easing bias.
Cheers,
Bernard.
PS: Catch you tomorrow with reaction to the G3 central bank decisions today.
