The Australian and New Zealand dollars slid through the bottom of their recent trading ranges overnight. Global stocks fell 1-2% after Fitch downgraded the United States’ sovereign rating from AAA.
In our deep dive interview, we talk with ANZ’s Chief Economist for Greater China Raymond Yeung about why consumers in China are stashing cash, rather than spending it, and what’s being done about it.
The 5 things you need to know
Risk-sensitive currencies have fallen sharply over the last 24 hours. The Australian dollar slumped under 66 USc and is hovering near a three-month low at 65.4 USc at 6am AEST. The NZ dollar fell decisively through 61 USc.
Global stock markets were unnerved overnight by Fitch downgrading the United States from the top AAA rating. Only nine countries are now AAA-rated, including Singapore and Australia in the Asia Pacific. US bond yields jumped after the US Treasury increased its quarterly borrowing plans by US$274 billion to US$1 trillion. The US 10-year yield rose to an eight-month high of 4.12%.
US ADP private payrolls rose 324,000 in July. The consensus was 189,000. It’s a key figure ahead of official US non-farm payrolls on Friday.
Jobs data in New Zealand was better than expected, with solid employment growth and slightly weaker-than-forecast wage growth.
Oil prices have risen to three-month highs over US$83/barrel this week because supply cuts from Russia and Saudi Arabia are finally kicking in.
Cheers
Bernard
