Oil jumps to US$118/barrel after Donald Trump suggests blockading the Strait of Hormuz for months. The US Fed holds rates as dissenters oppose an easing bias. And Australian core inflation is below forecasts, but the RBA is still set to hike next week.
In our deep-dive interview, ANZ Economist Maddy Dunk explains why the RBA is so focussed on inflation expectations, following March’s price data.
5 things to know in 5 minutes:
The Federal Open Markets Committee has just held the Federal Funds Rate at a range of 3.5-3.75%, as expected. But markets initially viewed the decision as hawkish due to wording in the statement about three dissenters who did not want to include an easing bias, says ANZ Economist Henry Russell, speaking shortly after the statement was issued at 4am Sydney/Melbourne time.
The Reserve Bank of Australia looks still set to raise rates again next week, after headline CPI rose to 4.1% in the March quarter, in line with expectations. ANZ Economist Maddy Dunk says there were some welcome signs for the RBA, with trimmed mean inflation below forecast at 0.8% in the quarter.
An inflation surprise of sorts in New Zealand yesterday as Stats NZ released data showing the costs average households face were up only 2.1% in the year to March, compared to the 3.1% headline CPI. ANZ Senior Economist Miles Workman says there are some key differences in the measures.
The Bank of Thailand held its benchmark rate at 1% yesterday, as expected. ANZ FX Analyst Kausani Basak says the decision was unanimous as the rate setting committee eyed downside risks to growth from the Middle East conflict.
Kausani says ANZ Research expects the Bank of Thailand to keep rates on hold for now, but will monitor for any durability of inflation.
Cheers,
Bernard.
PS: Catch you tomorrow with rate decisions from the European Central Bank and the Bank of England.
