Wednesday: Australian confidence surges

US stocks take a breather, while Treasury yields and Bitcoin continue to surge following the US election. Australian consumers and businesses are the most confident since early 2023, and New Zealand’s economic slump looks to have bottomed out.

ANZ Senior Senior China Strategist Zhaopeng Xing says China’s authorities look to have held off announcing a larger stimulus package last week to keep their powder dry for whatever a Donald Trump-led United States throws at their economy.

5 things to know:

1. US stock markets took a breather overnight while Treasury yields climbed, as traders turned their attention to upcoming inflation data. ANZ Economist Bansi Madhavani says October CPI data tonight will give some important clues for whether the Federal Reserve might cut again or hold in December.

2. Australian consumers and businesses are their most confident since early 2023 as tax cuts and cost of living support flows through to households and their spending. ANZ Economist Maddy Dunk says ANZ Roy Morgan Consumer Confidence shows people paying off a mortgage are now more confident than renters once again.

3. Maddy says the Reserve Bank of Australia should be feeling pretty comfortable about the situation, particularly looking at cost and price growth measures in NAB’s business confidence survey.

4. New Zealand’s economic downturn looks to have bottomed out, with ANZ’s Truckometer readings for light and heavy traffic both ticking up in October. ANZ Economist Henry Russell says it’s still going to take a while for stronger activity to really stick though.

5. India’s headline inflation rate surged above the Reserve Bank of India’s ‘tolerance’ rate of 6% in October. That was driven by a jump in vegetable prices, without which, inflation would have been 3.6% - below the 4% target. ANZ Economist Dhiraj Nim says the reading puts a December rate cut at risk, with GDP data at the end of the month now key to watch for indicating what the RBI might do.

Cheers

Bernard

PS: Catch you tomorrow with what Australian wage data today could mean for the timing of RBA rate cuts.