US Treasury yields continue to rise and stocks fall as hopes of multiple Fed rate cuts fade. A strong US dollar sees the Yuan slide towards 16-year lows, triggering intervention. And the oil price rises again overnight following new US sanctions.
In our bonus deep dive interview, ANZ New Zealand Chief Economist Sharon Zollner previews how New Zealand’s economy looks set to perform over 2025.
5 things to know in 5 minutes:
Weakness in the US stock market overnight has added to early 2025 jitters triggered by rising bond yields and fast-disappearing expectations that the Federal Reserve will cut rates again. ANZ Head of G3 Economics Brian Martin says markets are waiting to see what impact the incoming Trump administration’s policies will have on inflation.
China’s yuan has begun the year sliding to new 16-year lows, forcing various types of intervention by authorities in Beijing. ANZ’s Head of Asia Research Khoon Goh cites prospects of US tariffs, and a widening differential with US interest rates.
Khoon says that ultimately the yuan will be forced lower, but not before the Chinese New Year.
The ANZ Indeed job ads series rose in December from November. ANZ Australia economist Maddy Dunk says that resilience could be important for the Reserve Bank of Australia as it looks at whether to cut rates next month.
China reported exports grew 10.7% in December from a year ago, which was faster than the 7% consensus forecast. Imports grew 1% when economists expected a 1.5% fall. ANZ’s Senior China Strategist Zhaopeng Xing says Chinese factories are ramping up production ahead of those pending US tariffs.
Cheers
Bernard
PS: Watch out tomorrow for more on what’s happening in India, where the rupee hit a record low and India’s stock market fell 2.5% overnight.
