The US and China resume trade talks, as Chinese export data shows a growing fall in US shipments. Chinese factory gate prices experience stronger deflation in May. New Zealand’s manufacturing activity shows strength in the March quarter.
In our deep dive interview, ANZ Senior Commodities Strategist Daniel Hynes analyses how OPEC has been shifting in its strategy to phase out previous production cuts.
5 things to know in 5 minutes:
Stock markets were positive after the US and China resumed trade talks. The news came as data showed China’s exports were up 4.8% in May from a year ago, below market expectations for 6%. ANZ Economist Vicky Xiao Zhou says exports to the US were down 34% over the year, compared to a 21% drop in April.
Markets continued to digest US non-farm payrolls data for May. 139,000 jobs were created - above expectations. ANZ International Economist Tom Kenny says that may not be durable following downward revisions to previous months, and a narrow concentration of hiring. He says the FOMC will remain patient.
In China, annual consumer price inflation remained at minus 0.1% in May. Producer price inflation was minus 3.3% - weaker than expectations. ANZ Senior China Strategist Zhaopeng Xing says limited external demand and imported deflation following the April tariff announcements caused the drop.
The Reserve Bank of India’s oversized rate cut of 50 basis points on Friday was a surprise, but represents a front-loading of easing, says ANZ Economist Dhiraj Nim. Markets had expected a 25 basis point cut after strong GDP data last week. There could still be another 25 basis point cut later in the year, Dhiraj says.
The last of New Zealand’s partial Q1 GDP data - manufacturing volumes - increased 2.4% in the March quarter from December. That came on top of a 1.2% rise in Q4. ANZ Economist Matthew Galt says Q1 saw the biggest quarterly increase since mid-2022, led by meat and dairy manufacturing.
Cheers,
Alex (standing in for Bernard).
PS: Catch you tomorrow with a look ahead to US CPI data for May.
