Strong US jobs data adds to the case for a Fed hold. Lower inflation in the EU supports an ECB rate cut this week. Australia’s Q1 GDP growth is set to be weaker on falling public demand, and RBA minutes reveal how much a 50 basis point cut was discussed in May.
In the second of two deep dive interviews into Australia’s agriculture commodity outlook, ANZ Commercial’s Head of Agri Business Mark Bennett highlights the challenges and opportunities for Australia’s sheep, dairy and cropping farmers.
5 things to know in 5 minutes:
Euro inflation fell sharply in May to 1.9%, which ANZ Research says will support the ECB to cut rates 25 basis points later this week. In contrast, US job openings data was stronger than expected in April. ANZ Economist Bansi Madhavani says that points to the FOMC holding rates later this month.
ANZ Research has lowered its Australian Q1 GDP forecast to just 0.2% following the last partial indicators out yesterday. Falls in public sector demand, government investment, net exports and company profits are set to lead the weakness, says ANZ Senior Economist Adelaide Timbrell.
Reserve Bank of Australia board minutes yesterday revealed just how much a 50 basis point cut was considered last month. ANZ Head of Australian Economics Adam Boyton says there was a lot more space devoted to the case for the eventual 25 point cut. Adam expects two further cuts in August and February.
ANZ Roy Morgan Australian Consumer Confidence fell again last week by 0.6 points to 86.4 on reduced confidence in year-ahead financial conditions. ANZ Economist Sophia Angala says the effects of RBA rate cuts are starting to show though.
New Zealand’s terms of trade improved 1.9% in Q1 as export price growth of 7.1% outstripped import prices at 5.1%. ANZ Economist Matthew Galt says export price strength was led by dairy, meat and wool.
Cheers,
Alex (standing in for Bernard).
PS: Catch you tomorrow with analysis of Australia’s first quarter GDP figures and what they could mean for the RBA.
