US Treasury bonds sold off again overnight, pushing the 10-year yield to 4.91%, its highest level since 2007. Oil rose 2% on a drop in US inventories. Chinese GDP was stronger than expected.
In our bonus deep-dive interview, ANZ’s Head of G3 Economics Brian Martin explains why US Treasury yields are rising, even though the Fed appears to have paused rate hikes.
5 things to know
The 10-Treasury bond yield is at 4.88% at 5am AEST, up 3 bps, but earlier hit a high of 4.91%. Concerns that big US Treasury issues will be needed to fund budget deficits headed for 10% of GDP are a factor in the selloff, Brian says.
Oil prices rose 2% overnight after US oil inventories fell 4.5 million barrels, and on fears the Israel-Hamas war is set to escalate in the Middle East.
China’s annual GDP growth rate of 4.9% in Q3 was better than market forecasts and Q1 to Q3 growth of 5.2% means China is set to achieve its official target of 5% for 2023, says ANZ’s Chief Economist for Greater China Raymond Yeung.
Raymond cites a two-speed economy with strong consumer spending, but weak property investment. He says ANZ may have to further raise its already-upgraded GDP growth forecast of 5.1% for 2023.
He says the GDP result will relieve some of the pressure for China’s authorities to engineer a much bigger stimulus plan.
Cheers
Bernard
PS: Look out tomorrow morning for the latest from Australian jobs figures due later today.
