US inflation data was cooler than forecast overnight, unleashing a rally on bond and stock markets on relief the Fed might be able to cut again after all. Australia’s jobs market data today will test the RBA’s ability to cut next month.
In our bonus deep dive interview, ANZ FX Analyst Felix Ryan talks through the slumps in the Aussie and Kiwi currencies this year as the US dollar takes off.
5 things to know in 5 minutes:
US core CPI inflation of 0.2% in December was below forecasts for 0.3%, sparking a rally in bond and stock markets on hopes the Fed could cut more than once in 2024. ANZ’s Head of G3 Economics Brian Martin says the data showed inflation pressures hadn’t re-accelerated.
ANZ Research expects data today to show Australia’s unemployment rate rose from 3.9% to 4% in December after flat jobs growth. ANZ Senior Economist Adelaide Timbrell says subtle shifts in end-of-year employment practices may depress the December figures.
Adelaide says the figures will be closely watched by the Reserve Bank of Australia as it determines whether it can cut interest rates in February.
Bank Indonesia delivered a surprise rate cut of 25 basis points to 5.75% yesterday. ANZ Economist Krystal Tan says the central bank cited low inflation and growth concerns, shifting away from supporting the currency.
South Korea’s central bank is expected to cut rates for a third time later today in the wake of economic and political turmoil sparked by the declaration late last year of martial law.
Cheers,
Bernard
PS: Catch you tomorrow with what that Australian labour market data means for a February rate cut by the RBA.
