The US Fed Chair shrugs off stronger US producer prices ahead of CPI data tonight. Power rebates & tax cuts turn Australian budget surpluses into deficits, but also cut inflation. New Zealand’s property market continues to struggle.
In our bonus deep dive interview, ANZ Head of G3 Economics Brian Martin explains why monetary policies of the world’s major central banks are diverging.
5 things to know:
US producer price inflation of 0.5% in April was above forecasts, but markets were reassured by US Federal Reserve Chair Jerome Powell saying the data wasn’t that hot. ANZ Head of G3 Economics Brian Martin sees core US CPI inflation tonight easing slightly to 0.3%.
Australia’s Federal Budget included $10 billion of new spending on tax cuts and power bill rebates, which was as expected. ANZ Head of Australian Economics Adam Boyton says that meant expectations were unchanged for when the RBA will cut.
Adam says the Treasury has forecast that cost of living measures in the Budget will help keep inflation trending down.
UK wages growth of 5.7% in the three months to March vs a year ago was slightly stronger than expected, which Brian says will keep the Bank of England on edge as it looks to cut in June or August.
New Zealand’s housing market remained sluggish in April, REINZ data showed. ANZ Senior Economist Miles Workman pointed to rising inventories and an increase in the number of days to sell homes.
Cheers
Bernard
PS: Catch you tomorrow with detail from those US CPI numbers and what they might mean for global interest rates.
