Stocks and bonds rallied globally overnight after a Fed official said rates wouldn’t have to rise again. The A$ and NZ$ rose to multi-week highs vs the US$, helped by a report China is planning US$137b of new infrastructure spending.
In our bonus deep-dive interview, ANZ Asia Economist Krystal Tan explains how higher oil prices for longer will hit some Asian economies more than others.
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Bonds and stocks surged on more talk the sharp rise in bond yields in recent months was doing the Fed’s inflation-fighting for it. The US 10-year Treasury yield fell as much as 19 basis points to 4.61%. The S&P 500 and the Nasdaq were up 0.6% in late New York trade. The Eurostoxx 600 rose 2%.
Lower US market interest rates dragged the US$ lower vs the Aussie and Kiwi dollars. A Bloomberg report that China’s policymakers are planning US$137b billion of new infrastructure spending also lifted the commodity-sensitive currencies.
ANZ’s Head of G3 Economics Brian Martin says comments from Atlanta Federal Reserve Bank President Raphael Bostic overnight that "I actually don't think we need to increase rates anymore," boosted markets.
Australia’s NAB Business Survey for September showed cost and price pressures at their weakest since 2021, says ANZ Senior Economist for Australia Adelaide Timbrell.
ANZ’s Roy Morgan weekly survey of consumer confidence in Australia showed the strongest results since February, says Adelaide.
Cheers
Bernard
PS: Catch you tomorrow with a preview of key US inflation figures for September.
