The euro fell sharply overnight as traders pored over Europe’s trade deal with the United States and saw a 15% tariff slowing its economy. The yen fell too, along with the Aussie and Kiwi dollars.
In our deep dive interview, ANZ’s Chief Economist for Southeast Asia and India, Sanjay Mathur, looks at how the Reserve Bank of India could deal with surplus liquidity in the banking system.
5 things to know in 5 minutes:
European and stocks and the euro fell overnight as traders eventually viewed the EU’s average tariff rate rising to 1% to 15% slowing growth, says ANZ Economist Bansi Madhavani. The Aussie and Kiwi dollars fell too after Donald Trump said he was considering a 15-20% tariff range for all other countries, which in theory would include Australia and New Zealand, who are currently expecting 10% tariffs.
Bansi says Europe’s economy will feel the chill, but not fall into a recession.
The yen also fell vs the US dollar overnight, which ANZ’s Head of FX Strategy Mahjabeen Zaman says is partly due to its tariff deal, and a likely hold this week by the Bank of Japan, instead of a hike.
Malaysia’s Government has announced a stimulus package, including a 100 ringgitt (USD25) per adult cash payout. Sanjay says the package is worth about 0.14% of GDP.
Partial New Zealand jobs data for June was soft, which will weigh on Q2 Jobs data, says ANZ New Zealand Senior Economist Miles Workman
Cheers,
Bernard.
PS: Catch you tomorrow with a preview of the Bank of Japan’s decision later in the day.
