International investors sell US assets after Moodys cut the US sovereign credit rating. The UK does a trade deal with the EU. The wealth effect from China’s property market slump is still on consumption. The RBA is expected to cut 25 bps today, but be cautious about more. And Thailand’s stronger-than-expected GDP flatters to deceive.
In our deep-dive interview, ANZ’s Group Chief Economist Richard Yetsenga takes stock of the latest tariff moves.
5 things to know in 5 minutes:
The US dollar and US Treasuries sold off overnight after Moody’s downgraded the United States credit rating overnight. That pushed up the Aussie and Kiwi dollars. It’s all about concerns about the US Budget deficit, says ANZ Economist in London Bansi Madhavani.
The UK signed a new trade deal overnight with the European Union, with which it does 50% of its goods trade and 40% of its services trade. The wins aren’t that great for Britain though, as Bansi reports.
The Reserve Bank of Australia is expected to cut its cash rate by 25 basis points later today to 3.85%, but it will be cautious about suggesting a lot more rate cuts, says ANZ’s Head of Australian Economics Adam Boyton.
China reported weaker than expected retail sales growth yesterday, which ANZ’s Chief Economist for Greater China, Raymond Yeung, says is due in part to the wealth effects of China’s property downturn.
Thailand reported better than expected GDP growth in the March quarter of 0.7%, but ANZ Asia Economist Krystal Tan says the number looked better than it actually was.
Cheers,
Bernard
PS: Catch you tomorrow with detail and analysis from the RBA’s decision later today.
