Mexico secures a one-month reprieve from tariffs by agreeing to send troops to the US border. All eyes are now on a call this morning between President Trump and Canadian PM Trudeau; Gold and the US dollar rise amid the see-sawing uncertainty.
In our bonus deep dive interview, ANZ’s Head of Asia Research Khoon Goh talks about how Trump’s tariffs are likely to drive the yuan and other Asian currencies around, with tomorrow’s fix of the Chinese currency by the People’s Bank of China being a key moment.
5 things to know in 5 minutes:
US tariffs on Mexico have been delayed a month after Mexico agreed to send 10,000 troops to the US boarder. All eyes are now on whether Canada can secure a similar pause, with President Trump and Canadian Prime Minister Trudeau set to hold further talks this morning. ANZ Head of G3 Economics Brian Martin says the developments indicate the worst-case scenario may not materialise.
The see-sawing news sent traders into safe-havens overnight - the gold price was up 0.66% at $2,853 an ounce - just off a new record high overnight. The S&P 500 meanwhile was trading down 0.75% at 4am Sydney/Melbourne time, although it bounced from lows after the announcement of the Mexico news. Brian says there’s still a huge amount of uncertainty out there.
Australian retail spending was much healthier than forecast going into Christmas, ANZ Economist Maddy Dunk says. December quarter retail volumes data showed quarterly growth doubling to 1.0%. The 0.1% fall in nominal sales in the month of December from November was the best December since 2019.
Australia’s labour market is also looking robust, with the ANZ Indeed job ad series showing a second month of stabilisation of job ads, says ANZ Economist Sophia Angala.
India’s central Government Budget on the weekend included income tax cuts and a higher fiscal deficit than expected. So how does that change the landscape for the Reserve Bank of India ahead of its decision on Friday night? ANZ Economist Dhiraj Nim says the fiscal impulse is less negative or contractionary than it was, but remains negative.
Cheers,
Bernard
PS: Catch you tomorrow with a preview of New Zealand’s labour force data for the December quarter.
