Federal Reserve members are backing their 50 basis point rate cut, supporting views of a soft landing. The Aussie dollar is strengthening ahead of potentially hawkish RBA rate commentary today. Expectations rise for a new China stimulus package.
In our bonus deep dive interview, ANZ Senior Economist Catherine Birch analyses how the RBA is placed for its cash rate decision today following last week’s 50 basis point cut by the Fed, and the ongoing strength in Australia’s jobs market.
5 things to know:
US stocks and the dollar firmed. ANZ Economist Bansi Madhavani says several Federal Reserve members said they believed last week’s 50 basis point rate cut was pragmatic and would limit further weakness in the US jobs market.
The Aussie and Kiwi dollars also rose. ANZ Head of FX Research Mahjabeen Zaman says any indications from the RBA today that it might hold rates higher for longer will support the Aussie.
China’s central bank and two other agencies are set to hold an unusual news conference this morning. ANZ Senior Rates Strategist Zhaopeng Xing is expecting the PBoC to push through 80 basis points of rate cuts for mortgages, which would deliver 300 billion yuan of interest rate relief for homeowners.
Malaysia’s CPI inflation fell to an annual rate of 1.9% in August from 2.0% in July, in line with expectations. ANZ Economist Arindam Chakraborty says the removal of a subsidy for petrol will be key factor for inflation in coming months.
Singapore’s annual CPI inflation rate fell to 2.2% in August from 2.4% in July, although sticky services inflation meant underlying price pressures were a bit above expectations, says ANZ’s Head of Asia Research Khoon Goh.
Cheers
Bernard
PS: Catch you tomorrow with a review of the RBA’s rate decision.
