US Treasury yields surged again overnight, boosting the US dollar vs the yen and the Aussie and Kiwi dollars. US stocks slumped 1.5%-2%. The yen spiked after briefly going through 150, triggering unconfirmed talk of intervention.
In part one of our bonus deep-dive interview, ANZ’s Chief Economist for Greater China Raymond Yeung explains the importance of the Hong Kong dollar’s unbroken peg with the US dollar on the eve of its 40th anniversary.
5 things to know
The US 10-year Treasury bond yield rose another 12 bps to a 16-year high of 4.80% overnight. The S&P 500 and Nasdaq fell 1.5%-2% on the extended bond market selloff. The US$ rose vs most currencies. The A$ fell to 63.0 USc from 63.6c. The NZ$ fell to 59.0 USc from 59.5c. Markets now see more than a 50% chance of a Fed hike in December.
The RBA held its cash rate at 4.1% yesterday, but with hawkish tone, as expected. It was new Governor Michele Bullock’s first decision-making meeting in charge and she didn’t change much. ANZ’s Head of Australian Economics Adam Boyton says the next meeting might be more interesting.
Australian residential building approvals bounced 7% in September, but remain near 10-year lows and unable to eat into shortages much, says ANZ Senior Economist for Australia, Adelaide Timbrell.
Australian consumer confidence ticked up last week, although it is still near six-month lows. Pleasingly for the RBA, inflation expectations fell.
Australian job ads firmed in September and were steady for the quarter, boosted by growth in health, education and retail ahead of Christmas, says ANZ Australia Economist Maddy Dunk.
Bernard
PS: Look out tomorrow for the latest today’s decision from the RBNZ. It is also seen holding hawkishly.
