Jerome Powell say the Fed can cut rates this year, sending stocks up and Treasury yields down. Australian growth may be bottoming out. Gold rose over US$2,150/oz to new record highs overnight. All eyes are on the ECB rates decision tonight.
In our bonus deep dive interview, ANZ Senior International Economist Tom Kenny reviews the most recent US fiscal projections and explains how political polarisation is affecting the US sovereign credit rating.
5 things to know:
The S&P 500 is up 0.8% this morning, while the US 10-year Treasury is down 4 bps to 4.09% after the Fed Chair talked about rate cuts this year. ANZ’s Head of G3 Economics Brian Martin says the markets see a June rate cut, but the Fed may need more data, meaning a July move is possible.
Australia’s economy grew 0.2% in the December quarter and 1.5% annually, as expected. ANZ Senior Economist Blair Chapman says the December and March quarters look to be the low point for growth.
The European Central Bank is expected to hold its benchmark rate, although some members of the governing council see tonight’s meeting as a ‘live’ one for a cut, says Brian.
South Korea’s CPI rose 3.1% annually in February - marginally above the market consensus for 3%, and still above the Bank of Korea’s 2% target. ANZ Economist Krystal Tan says while core inflation held steady at 2.5%, there is still more to do.
ANZ Senior Commodities Strategist Daniel Hynes says geopolitical concerns and expectations the Fed will soon cut rates are driving gold to record highs, along with investors adding gold to their portfolios.
Cheers
Bernard
PS: Catch you tomorrow with the ECB decision and a look ahead to key US jobs data on Friday night.
