US stocks and Treasury yields are up on election day as data suggests whoever wins is going to inherit a growing US economy. Meanwhile, the RBA holds and stays mildly hawkish, and New Zealand’s unemployment rate is expected to tick up today.
In our bonus Deep Dive interview, ANZ New Zealand Chief Economist Sharon Zollner reviews the recent leap in ANZ’s Business Outlook survey and looks ahead to the Reserve Bank’s rate decision at the end of the month.
5 things to know:
It’s election day in the US. Stocks and US Treasury yields were up as voting began. ANZ Head of G3 Economics Brian Martin says whoever wins the election is set to inherit an economy that has skipped a recession and is growing.
Against all of this, we have a US interest rate decision Friday morning Sydney/Melbourne time. Brian says the Federal Open Markets Committee is expected to look through the politics.
The Reserve Bank of Australia yesterday left the cash rate on hold at 4.35%, saying underlying inflation remained too high, and that labour market conditions remained tight despite easing gradually. ANZ Head of Australian Economics Adam Boyton says the post-meeting statement remained mildly hawkish, although some key forecasts were revised down.
Ahead of the RBA’s decision, ANZ Roy Morgan Consumer Confidence posted another small rise as households grew more confident about their current finances. The index is up 7.5 points since the July tax cuts kicked in. ANZ Economist Maddy Dunk says inflation expectations have also been falling.
New Zealand’s Q3 unemployment rate today is forecast by ANZ Research to rise from 4.6% to 4.9%, while the Reserve Bank is expecting 5%. ANZ Senior Economist Miles Workman says a reading 0.2 points either side of that shouldn’t change expectations for a 50 basis point rate cut on November 27 - although he says there is scope for surprises.
Cheers
Bernard
PS: Catch you tomorrow with coverage of what US election results mean for the market.
