The People’s Bank of China left a key interest rate on hold, surprising markets expecting a cut after more signs China’s economy is generating deflation. Japanese stocks hit a 34-year high on a weak yen and lower bond yields.
In part two of our bonus deep-dive interview on Australia’s commercial property investment pipeline, ANZ Senior Economist Adelaide Timbrell details the overall cyclical and structural drivers.
5 things to know
The Nikkei rose 1% to a fresh 34-year high over 35,000, thanks to a weak yen and lower Japanese bond yields, says ANZ’s Head of FX Research Mahjabeen Zaman.
Chinese stocks fell 0.1% to their lowest levels since 2019 after the Peoples Bank of China surprised markets by not cutting a key bank lending rate. ANZ’s Chief Economist for Greater China Raymond Yeung sees an eventual cut.
Raymond sees the PBoC also cutting the Reserve Requirement Ratio (RRR) for banks before the Chinese New Year (Feb 10) surge in demand for cash.
Chinese markets are more focused on TSMC’s market update on Thursday than the weekend election result in Taiwan, says Raymond.
The ANZ Indeed job ads series showed a 0.1% rise in December, which is unlikely to shift the RBA’s view of holding its cash rate for now, says ANZ Australia Senior Economist Catherine Birch.
Cheers
Bernard
PS: Look out tomorrow for a review of NZ business confidence results due today and previews of China GDP and US retail sales data tomorrow night.
