All eyes are on the RBA’s first cash rate decision of 2024 today, which is also its first with a new two-day board meeting that releases new forecasts and has a news conference all at once.
In our bonus deep dive interview, ANZ’s Head of G3 Economics Brian Martin explains why US GDP and services inflation remains so resilient that the Fed is likely to have to wait until the middle of 2024 to cut the Fed Funds rate.
5 things to know
Fed Chair Jerome Powell said overnight the FOMC wants to wait to be absolutely sure of low inflation before it cuts. That drove bond yields up 9-13 bps and US stocks down.
The Australian dollar fell sharply overnight in the face of rates-driven US dollar strength to 64.81 USc at 5am Sydney/Melbourne time, down from 66 USc over the last 48 hours.
The Aussie has also been weak ahead of RBA meetings during the current cycle, says ANZ’s Head of FX Research Mahjabeen Zaman.
ANZ Head of Australian Economics Adam Boyton sees the RBA holding today at 2.30pm Sydney/Melbourne time and will watch its statement for any changes in its previously hawkish tone.
ANZ Australia Economist Maddy Dunk says surprisingly solid ANZ Indeed job ads figures for December and January show how resilient Australia’s labour market has been.
Cheers
Bernard
PS: Catch you tomorrow with a full review of the RBA decision and a look-ahead to New Zealand jobs.
