Markets were mixed overnight, with equities, US Treasury yields and the oil price all rising. The RBA is expected to hold today, but what it says about inflation is being closely watched. And there are glimmers of hope for China’s domestic demand.
In our bonus deep dive interview, ANZ New Zealand Economist Henry Russell explains why it’s so important for central banks to get on top of sticky non-tradable or domestic inflation.
5 things to know:
Markets were mixed overnight - equities, US Treasury yields and the oil price rising amid a lack of major data. The Aussie and Kiwi dollars were down slightly ahead of the Reserve Bank of Australia’s cash rate decision today. ANZ Head of Australian Economics Adam Boyton says he’s watching out for the RBA to make a couple of changes to its statement following recent developments, with the first about stronger consumer spending.
Adam says the RBA might also discuss how the recent Federal Budget contained measures that could put some downward pressure on headline inflation.
ANZ-Indeed Job ads fell 2.1% in May. ANZ Senior Economist Catherine Birch says there has been an 8.2% decline in job ads since the end of 2023, indicating continued softness in the Australian labour market over the coming year.
The Peoples’ Bank of China held its Medium-Term Lending facility rate on hold at 2.5%. ANZ Senior China Strategist Zhaopeng Xing says the biggest reason for not cutting is the strength of China’s export-led growth.
The value of Chinese home sales was down 30.5% annually in May, but there was a glimmer of hope on the domestic demand front: May annual retail sales growth of 3.7% outpaced expectations for 3%.
Cheers
Bernard
PS: Catch you tomorrow with a full review of the RBA’s rate decision and commentary.
