US Fed officials see disinflation progress and indicate rate rises are unlikely. US dollar firms further vs the Yen. China property prices would need to fall 35% to trigger buyer interest because rental yields are still too low, says ANZ China Strategist Zhaopeng Xing.
In our bonus deep dive interview, ANZ New Zealand Senior Economist Miles Workman looks at why New Zealand’s soggy economic outlook is unlikely to get much support from the RBNZ, which is expected to hold rates at 5.5% tomorrow.
5 things to know:
The US dollar and Treasury yields rose a bit after Fed speakers said it may take time to get inflation down. ANZ Economist Bansi Madhavani says it all comes down to data dependence and patience.
Thailand’s economy grew 1.1% in Q1, nearly double the consensus forecast. ANZ Economist Krystal Tan says growth in tourism and private consumption helped offset a decline in goods exports and investment, reducing the need for a rate cut.
China’s big property rescue plan hasn’t solved the demand problem in the housing market and prices would have to fall another 35% before rental yields became attractive, but local government buying will set a floor above that, says ANZ Senior China Strategist Zhaopeng Xing.
Zhaopeng says the current rental yields in China of around 1.6% would need to rise to be higher than China’s 30-year bond yields of around 2.5% for investors to justify buying.
Taiwan’s export orders rose 10.8% in April from a year ago, the biggest jump in nearly two years. That was driven by demand for semiconductors for AI and cloud computing, says Krystal.
Cheers
Bernard
PS: Catch you tomorrow with a review of the RBA minutes due later today.
