The US Federal Reserve has kept rates on hold and signaled a lack of progress towards its 2% inflation goal in recent months. New Zealand’s labour market weakens, but wage growth is still high. The copper price has been on a roll in 2024.
In our bonus deep dive interview, ANZ Economist Arindam Chakraborty looks at how non-China Asia exports have been supported this year by strong US demand.
5 things to know:
The US Federal Reserve held its benchmark rate in the 5.25%-5.5% target range this morning, and indicated a lack of further progress towards its 2% inflation target in recent months. ANZ Head of G3 Economics Brian Martin says the Fed’s statement is consistent with ANZ’s view that the Fed will make two 25-basis point rate cuts this year.
New Zealand’s unemployment rate rose from 4% to 4.3% in the March quarter, a touch above the Reserve Bank’s forecast. ANZ Economist Henry Russell says the RBNZ will now be watching if wage growth strength keeps feeding inflation.
The copper price is up over 10% in the past month, crossing US$10,000/tonne. ANZ Senior Commodity Strategist Daniel Hynes says the strength is due to an improving backdrop in the US and Europe, and stronger activity in China.
South Korea’s exports rose 13.8% in April from a year ago, with exports to the US up 24%. Meanwhile, ANZ Economist Krystal Tan says CPI data for April due today looks set to show headline annual inflation easing a touch to 3%.
Krystal says Indonesia’s CPI is also expected to ease slightly. She’s forecasting a headline print of 2.96% in the year to April.
Cheers
Bernard
PS: Catch you tomorrow with further reaction to the Fed.
