Global markets are on tenterhooks ahead of the Fed’s decision early tomorrow morning, although market expectations about rate cuts starting in March eased a bit more.
In our bonus deep-dive interview, we hear from ANZ Economist Dhiraj Nim about India’s pre-election Budget due on Thursday night.
5 things to know
Market expectations about Fed rate cuts starting in March edged down 10 basis points to 39% after better-than-forecast US consumer confidence and job openings data overnight.
RBNZ Chief Economist Paul Conway has pushed back at market views that weak Q4 data would lead to early rate cuts. ANZ NZ Chief Economist Sharon Zollner explains.
Sharon says a gap remains between market views of 50 bps of rate cuts by August, and the RBNZ’s view, which as recently as late November included a chance of a rate hike early this year.
Australian consumer confidence has remained stubbornly below its long-run average because inflation hits most consumers, while higher unemployment hits fewer consumers, says ANZ Senior Economist Adelaide Timbrell.
Australian retail sales fell 2.7% in December after a downwardly revised 1.6% rise in November. That reflected a structural shift to buying on Black Friday, rather than Boxing Day, and eating out, rather than buying clothes and other products. However, December dining and takeaway spending was weak too, says ANZ Australia Economist Maddy Dunk.
Cheers
Bernard
PS: Catch you tomorrow with the latest on Australian inflation data due later today.
