Kamala Harris’ backing to replace Joe Biden supports tech stocks, while a flight to safety sees the Aussie and Kiwi dollars fall. European stocks rise on hopes of less trade friction under a Harris Presidency. The People’s Bank of China surprises by cutting rates.
In our bonus deep dive interview ANZ’s Chief Economist for Greater China Raymond Yeung extracts the meaning in a key phrase to come out of last week’s Third Plenum communique, and the significance for China’s economy.
5 things to know:
Markets are digesting the news of US President Joe Biden pulling out of November’s election race and endorsing VP Kamala Harris. ANZ Senior International Economist Tom Kenny says Harris gives the Democrats a better chance of retaking the House from the Republicans and keeping the Senate.
US tech stocks and European stocks rose. ANZ Head of G3 Economics Brian Martin says a Harris win would mean a less fractious trade relationship between the EU and US, than under a Trump administration.
The Aussie and Kiwi dollars were both down over half a percent overnight due to the initial uncertainty from those shifts in US politics. ANZ New Zealand Chief Economist Sharon Zollner says there is still a question mark over how large the safe-haven flows will be.
The People’s Bank of China surprised everyone yesterday by cutting its seven day reverse repo rate by 10 basis points to 1.7%, despite earlier concerns about bank profit margins, says ANZ’s Senior China Strategist Zhaopeng Xing.
Singapore’s annual Inflation rate is expected to fall to 2.7% from 3.1% in figures out later today. ANZ’s Head of Asia Research Khoon Goh says there’s a big one-off that means the MAS is in no hurry to ease policy.
Cheers
Bernard
PS: Catch you tomorrow with the detail from Singapore’s CPI data.
