European stocks hit record highs and bond yields rise as higher defence spending is priced-in amid Ukraine peace talks. Japan’s economy hits its growth stride, and high dairy prices and a low Kiwi dollar are combining to support New Zealand’s economy.
In our bonus deep dive interview, ANZ Australia Senior Economist
explains why the improving inflation outlook has given the Reserve Bank of Australia the room to cut 25 basis points to 4.1% later today, and then once more in August.5 things to know in 5 minutes:
European shares hit record highs overnight, as investors flocked to Defence stocks amid expectations for greater military spending following news on Ukraine peace talks. US markets were shut for President’s day. ANZ Head of G3 Economics Brian Martin says discussion of joint European defence bonds by the French supported rising bond yields.
Japan’s economy is finally generating some growth and inflation that is forcing the Bank of Japan to put up rates. ANZ FX Analyst Felix Ryan says data yesterday showed Japan’s Q4 GDP growth of 2.8% from a year ago was much stronger than market expectations for 1.1% growth from a year ago.
Growth was also higher than expected in Malaysia in the fourth quarter. ANZ Economist Arindam Chakraborty says the 5% growth figure for Q4 is likely to moderate to around 4.5% in 2024.
There’s one part of the New Zealand economy that’s doing very well at the moment, says ANZ New Zealand Chief Economist Sharon Zollner: Dairying.
There’s another tiny group of businesses who have also had very busy couple of weeks: florists and jewellers leading up to Valentines day. Sharon has analysed ANZ’s card spending stats to find out what happened this year.
Cheers,
Bernard
PS: Catch you tomorrow morning with coverage of the RBA’s rate decision later today, and a look ahead to the RBNZ’s Wednesday move.
