Expectations firm for a September rate cut by the Fed. The Yen holds steady after fresh jaw-boning. A strong Singapore dollar contains inflation, and import data for New Zealand shows some sectors are struggling.
In our bonus deep dive interview, ANZ Senior Rates Strategist Jack Chambers looks at how the Reserve Bank of Australia’s tone has become more hawkish at the same time as other central banks have started to ease policy.
5 things to know:
Global equity markets started the week on a firmer footing as expectations grow that the US Federal Reserve can start cutting rates in September. ANZ Head of G3 Economics Brian Martin says inflation signals were soft in May and June.
The Yen held steady overnight at 159.70 to the US dollar at 4am Sydney/Melbourne time. That followed renewed jaw-boning from Japanese officials yesterday. ANZ Head of FX Research Mahjabeen Zaman still expects the Bank of Japan to raise interest rates by 15 basis points at its July meeting.
Singapore’s annual core CPI was steady at 3.1% in May, while headline inflation rose to 3.1% from 2.7% in April - both in line with expectations. ANZ Head of Asia Research Khoon Goh says a strong Singapore dollar helped drive monthly declines in some consumer goods, although services prices remained elevated.
New Zealand’s merchandise trade balance delivered a surplus in May as exports rose 2.9% from a year ago, but ANZ Agriculture Economist Susan Kilsby says weakness in some import categories shows how domestic demand has fallen.
Malaysia’s headline CPI inflation is expected to edge up to 1.9% annually in May. ANZ Economist Arindam Chakraborty says the data will include the end of a diesel subsidy, although low consumption means that won’t have a major impact.
Cheers
Alex (standing in for Bernard, who’s on a mid-winter break this week)
PS: Catch you tomorrow with a look ahead to Australia’s May CPI indicator.
