The Reserve Bank of New Zealand holds and forecasts a rate hike this year, just not as early as markets expected. The Kiwi dollar falls over 1%. Australian wages continue growing strongly. And the Bank of England is set to cut rates from March.
In our deep-dive interview, ANZ Group Chief Economist Richard Yetsenga examines Fed Chair Kevin Warsh’s view that an AI productivity surge will allow for faster growth with lower rates.
5 things to know in 5 minutes:
The Bank of England looks set to cut rates next month following a drop in headline CPI inflation from 3.4% to 3% in January. ANZ Head of G3 Economics Brian Martin says services inflation, which has proven sticky over the past year, looks set to fall further from 4.4%, paving the way for monetary policy easing.
The Reserve Bank of New Zealand held its Official Cash Rate at 2.25% yesterday, as expected. ANZ New Zealand Chief Economist Sharon Zollner says forward guidance indicated rates would rise this year, but to a lesser extent than markets were expecting.
Sharon says ANZ Research is expecting the next move to be a hike in December. For the RBNZ’s part, it seems confident that inflation is going to moderate back down from 3.1% last quarter, just outside the target band.
Australian wages grew at 3.4% from a year ago in the December quarter, up slightly from Q3 and in line with market expectations. ANZ Economist Aaron Luk says growth was balanced in the quarter, but that public sector wages led the way over 2025, up 4% annually.
The focus now turns to Australian jobs figures for January, out today. Aaron is expecting the unemployment rate to rise slightly to 4.2%, and for employment growth of around 20,000 in the month.
Cheers,
Bernard.
PS: Catch you tomorrow with reaction to those Australian January jobs numbers.
