Global stocks surged 2% overnight after flat US inflation data bolstered hopes the US Federal Reserve can end its rate hike cycle.
In our bonus deep-dive interview, ANZ’s Chief Economist for Southeast Asia and India Sanjay Mathur explains how changes inside India’s banking system are likely to lift India’s potential GDP growth rate.
5 things to know
Core US CPI inflation of 0.2% was below forecasts for 0.3%. The S&P 500 jumped 1.9% and the Nasdaq rose 2.3%. The US 10-year Treasury yield fell 18 bps to 4.45%. The A$ jumped to 64.95 USc. The NZ$ rose to 59.89 USc.
Markets now see no chance of a Fed hike next month and expect a cut in June, vs July before the CPI data. ANZ’s Head of G3 Economics Brian Martin says market enthusiasm may be tempered by the Fed holding rates high for longer.
Australian consumer confidence slumped to a four-month low after the RBA’s rate hike last week. ANZ Australia Senior Economist Adelaide Timbrell writes confidence about economic conditions over the next five years also fell to its lowest level since April 2020.
ANZ Australia’s Senior Economist Blair Chapman forecasts a rise in Australian jobs of 27,000 in October, but says the RBA is likely to look through the noise from a temporary surge due to part-time Voice referendum jobs.
Brian Martin is watching for US retail sales growth to slow in data out tonight.
Cheers
Bernard
PS: Have a great day and look out tomorrow for the detail from Australian wages data later today, and that US retail sales data tonight.
