Global stocks slump again after Donald Trump restricts Nvidia chip exports to China. Safe-haven buying blasts Gold to US$3,349/oz. ANZ Research cuts its growth forecasts for US and China, and lowers its cash rate view for New Zealand
In our bonus Deep Dive interview ANZ Economist Vicky Xiao Zhao explains ANZ Research’s downgrade to its China growth forecasts as tariff uncertainty takes hold.
5 things to know in 5 minutes:
US stocks are down 2.5-3.5% after Donald Trump restricted Nvidia’s exports of high-end chips to China and the WTO forecast an 80% fall in trade between the US and China. Trump also threatened tariffs of 245% on some Chinese imports. Gold jumped more than US$100 an ounce to a record high US$3,349/oz. The recent trade and market volatility has led ANZ Research to cut its US growth forecast for 2025 by 50 bps to 1.5%, says ANZ Senior Economist Tom Kenny.
ANZ Research has also reduced its growth forecast for China’s economy over the next two years, despite higher-than-expected growth of 5.4% annually in Q1. ANZ Economist Vicky Xiao Zhao says the Q1 strength is a reason why stimulus has not been seen yet in China.
ANZ Research has also downgraded its forecast for New Zealand’s growth rate and lowered its Official Cash Rate view because of a struggling local recovery and rising global uncertainty. ANZ New Zealand Chief Economist Sharon Zollner now expects the OCR to be cut to 2.5% in Q4 and stay there for a year. The previous forecast had been for a 3.0% low.
The downgrade comes ahead of New Zealand Q1 inflation data, which ANZ Research is forecasting at 0.9% for the quarter and 2.5% for the year.
ANZ Economist Aaron Luk expects data today to show Australian employment growth in March of 35,000, and a steady unemployment rate at 4.1%.
Cheers,
Bernard
PS: We will next publish on Tuesday, 22 April following the Easter break.
