US stocks stabilised after yesterday’s tech-rout. Attention now turns to tomorrow’s FOMC decision, which could see US interest rates on hold; Meanwhile, Australia’s Q4 inflation today is expected to give the RBA a green light to cut rates in February.
In our bonus deep dive interview, ANZ Economist Arindam Chakraborty says the new Special Economic Zone between Singapore and its neighbouring Malaysian state will present opportunities for both economies.
5 things to know in 5 minutes:
US equity markets stabilised overnight, following yesterday’s AI-related tech rout. Attention now turns to the Federal Open Markets Committee’s first meeting of the year. ANZ Head of G3 Economics Brian Martin expects it to hold interest rates tomorrow, due to strong growth, low unemployment, sticky core inflation and policy uncertainty around tariffs.
Australia’s headline inflation rate is expected by ANZ Research to have fallen to 2.4% in the fourth quarter from 2.8% in Q3, with the market expecting 2.6%. ANZ Senior Economist Catherine Birch says the number is being pushed down by temporary cost of living support, meaning the focus for the RBA should be on core measures.
Catherine says there is room for core inflation to print above ANZ Research’s forecast and for the RBA to still be expected to cut rates next month.
Ahead of the inflation data, NAB’s business survey showed labour cost growth easing in December. ANZ Economist Maddy Dunk says, while on its own that would be welcomed by the RBA, other cost indicators rose.
Overall business conditions improved slightly in December, although Maddy says the series has been up and down recently, and the trend is down.
Cheers,
Bernard
PS: Catch you tomorrow as we analyse what Australia’s Q4 inflation data could mean for the RBA’s February rate decision.
