Global markets are mixed ahead of big US and Japanese rate decisions later this week. US retail sales are solid. New Zealand’s Government announces a bigger than expected increase in bond issuance, and Australian consumers end the year better off.
For our final bonus Deep Dive interview of the year, ANZ’s Group Chief Economist Richard Yetsenga looks at the key themes of 2024 and at what 2025 might bring for the global economy.
5 things to know in 5 minutes:
Global stocks fell slightly and bond yields edged lower after US headline retail sales were stronger than expected, although core sales were softer, reassuring the Fed can still cut tomorrow, says ANZ Economist Bansi Madhavani.
The other big interest rate decision this week is the Bank of Japan on Thursday. ANZ FX Analyst Felix Ryan is expecting a 25 basis point hike to 0.50%. Felix says the BoJ wants to normalise rates up towards 1%.
ANZ Roy Morgan Australian Consumer Confidence fell 1.6 points at 83.9 last week after Black Friday sales ended. However, ANZ Economist Maddy Dunk says the rise from a mid-year low shows consumers are ending the year better off.
Downward revisions to official growth forecasts and a lower forecast tax take have led the New Zealand Treasury to increase its bond-buying plan by a much-more-than-expected $20 billion, says ANZ Senior Economist Miles Workman.
There’s some light at the end of the tunnel for New Zealand’s housing market though. Prices rose 0.2% in November, according to the Real Estate Institute. ANZ Economist Henry Russell says prices look set to rise 6% in 2025.
Cheers
Bernard
PS: Have a safe and prosperous Christmas and New Year. We return on Monday, January 13.
