Sticky UK inflation has dashed mid-year rate cut hopes. Strong domestic inflation in New Zealand is a concern for the central bank, but the ECB looks on track to start rate cuts in June. Oil is down 3% on global demand concerns.
In our bonus deep dive interview, ANZ’s Head of FX Research Mahjabeen Zaman details four reasons why the US dollar has been so strong in recent weeks.
5 things to know:
US stocks fell overnight after some soft earnings reports. US Treasury yields and the US dollar fell. Oil was down 3% due to concerns about global demand. In the UK, expectations for a mid-year rate cut by the BoE were dashed due to stronger-than-expected inflation, ANZ Economist Bansi Madhavani says.
New Zealand’s annual inflation rate fell to 4% in the March quarter from 4.7% in December. That was slightly above the RBNZ’s forecast. ANZ Economist Henry Russell says non-tradables inflation at 5.8% should worry the RBNZ, which had forecast 5.3%.
Annual inflation in the Euro zone fell to 2.4% in March from 2.6% in February. Bansi says this is positive for chances the European Central Bank will cut in June.
Japan’s exports rose for the fourth month in a row in March, up 7.3% year on year. ANZ Head of FX Research Mahjabeen Zaman points to strength in car and chip exports, driven by the weak Yen.
Australian jobs data is out later today. ANZ Senior Economist Blair Chapman is forecasting the unemployment rate to rise to 3.8% and jobs growth of 25,000.
Cheers
Bernard
PS: Catch you tomorrow with a review of Australian jobs numbers and what it means for the RBA’s rate cut prospects.
