President Trump says US-China trade talks result in agreements on rare earths and magnets, and Chinese students. US inflation surprises to the downside in May, supporting rate cut expectations for later this year. Australian consumers look to spend.
In our deep dive interview, ANZ Economist Arindam Chakraborty explains ANZ Research’s call that the Philippines should pursue a fairer, or even under-valued exchange rate.
5 things to know in 5 minutes:
US President Donald Trump has said the trade talks between China and the US have resulted in a deal covering magnets and rare earths shipments from China, and Chinese students’ ability to attend US universities. ANZ Economist Bansi Madhavani says from London that, while the news is positive, market reaction was muted as traders looked for further detail.
Questions remain on whether current tariffs can or will go lower. Comments from Trump and the US Commerce Secretary indicate a 55% tariff will remain on Chinese goods. ANZ Economist Vicky Xiao Zhou says a G7 summit this weekend is now key to watch for further global trade developments.
In the US, CPI inflation surprised to the downside in May, with core CPI up just 0.1% against the 0.3% expected. Headline CPI was also up just 0.1%. Bansi says the softer print indicates businesses are holding back passing higher tariffs on to consumers. The FOMC will likely remain patient on rates, she says.
ANZ Roy Morgan Australian Consumer Confidence rose 0.3 points to 86.7 last week. ANZ Economist Sophia Angala says the time to buy a major household item sub-index rose to its highest since April 2022 on the back of retail sales events. Economic conditions indices were a drag after a weak Q1 GDP reading.
The downturn in New Zealand’s net migration since 2023 may be nearing a turning point. Provisional April data yesterday showed a seasonally adjusted monthly net migration gain of 1,800. ANZ Senior Economist Matthew Galt says that continued a stabilisation seen since mid-2024.
Cheers,
Alex (standing in for Bernard).
PS: Catch you tomorrow with further market reaction to the US-China trade situation.
