Gold hits a new record high as the US 10 year yield falls to its lowest point this year.; China holds the Yuan strongly amid depreciation pressure; and New Zealand’s job market loosens enough to green-light the RBNZ to cut 50 basis points this month.
In our bonus deep dive interview, ANZ Senior Commodities Strategist
explains what’s behind the surge in gold prices to record highs and a 5% fall in oil prices since Trump’s inauguration.5 things to know in 5 minutes:
Global markets are mixed this morning amid ongoing ructions in global trade, although gold rose to a fresh record high of over US$2,900 an ounce overnight, helped by a fall in the US 10 year yield of nine basis points to 4.41%. That came after a survey of US services activity showed new orders fell to their lowest level since June. China yesterday set its weekly fix for the Yuan at 7.1693 per US dollar - five basis point stronger than last week. ANZ Head of Asia Research Khoon Goh says the move is part of a measured response from China to US tariffs.
Khoon says the move signals China wants to achieve a resolution to the tariff war.
New Zealand’s unemployment rate rose from 4.8% to 5.1% in the fourth quarter last year, in line with ANZ Research and Reserve Bank of New Zealand expectations. Jobs fell a less-than-expected 0.1%, but ANZ Economist Henry Russell says the data still supports a 50 bps cut by the RBNZ this month.
Henry says the numbers are a reflection of where the economy has been, rather than where it is going. He says a recovery could be seen later in the year.
South Korea’s inflation rate was 2.2% in January - at the top end of expectations and above the Bank of Korea’s 2% target. ANZ Economist Krystal Tan says the upside surprise was mainly due to global energy prices and local currency weakness and shouldn’t stop the Bank of Korea cutting 25 bps this month.
Cheers,
Bernard
PS: Catch you tomorrow with what the Bank of England decides to do with interest rates. ANZ Research is expecting a 25 basis point to 4.5%.
