PMI results show the US economy is resilient, supporting only three Fed cuts in 2025. China’s retail sales disappoint again. NZ’s Government is expected to unveil a higher borrowing forecast today. Coldplay concerts in Auckland nudge inflation up a bit.
In the second in a series of bonus Deep Dive interviews to round out the year and to look ahead to 2025, I spoke with ANZ’s Head of Research for Asia, Khoon Goh, about Asia, ex China.
5 things to know in 5 minutes:
Markets are mixed this morning after US and Eurozone PMIs supported ongoing rate cuts, albeit at differing speeds. ANZ Economist Bansi Madhavani sees three more 25 bps cuts by the Fed next year, after a final cut for 2024 this week.
Bansi says Europe’s economy needs 150 basis points of cuts next year.
China’s retail sales disappointed in November, but production remains solid, leading to more discounting and deflation, says ANZ Senior China Strategist Zhaopeng Xing.
New Zealand’s Treasury is expected to downgrade its growth and tax forecasts in its half yearly update later today. ANZ NZ Senior Economist Miles Workman sees that leading to a NZ$6-8 billion increase in the Government’s borrowing quidance in the years to June 2028.
Miles says Coldplay concerts in Auckland last month appeared to nudge New Zealand hotel costs and domestic airfares higher in November.
Cheers
Bernard
PS: Tomorrow is our last podcast for 2024. We start again on January 13 with another week of year-ahead deep dive interviews.
