The yen bounces hard after slumping through 160. Some think Japan’s authorities intervened, but there’s no confirmation. ANZ Research has changed its expectation for Fed rate cuts this year to two 25 basis point cuts from four.
In our bonus deep dive interview, ANZ Head of Australian Economics Adam Boyton looks at how the RBA might react if Australia’s stage 3 tax cuts improve consumer confidence, which is now near 1990s-recession level lows.
5 things to know:
ANZ Research has changed its call for Fed rate cuts this year from four 25 basis point cuts to two, with one each in the third and fourth quarters, says ANZ Head of G3 Economics Brian Martin.
The yen rebounded strongly to sit at 156 per US dollar at 5 am Sydney/Melbourne time. Traders said intervention was possible, but not confirmed. ANZ FX Analyst Felix Ryan says the sharp correction could be due to thin liquidity in holiday trade.
Felix says if authorities did intervene, the ongoing difference in economic fundamentals between Japan and the US mean any effect won’t last long.
New Zealand jobs data on Wednesday is expected to show the labour market continuing to move into disinflationary territory. ANZ Economist Henry Russell is expecting the unemployment rate to rise from 4% to 4.2%.
Henry says employment growth is expected to remain strong at 0.3% in the March quarter as the effects of previous stimulatory fiscal policy show through.
Cheers
Bernard
PS: Catch you tomorrow with key Chinese PMI data.
