Global PMIs offer hope for an earlier US rate cut, an ECB cut in June, and an easing by the Bank of England in August. Australian inflation is set to keep easing. Currency volatility means a rate hike is not off the table in Indonesia.
In part two of our bonus deep dive interview, ANZ Group Chief Economist Richard Yetsenga offers some pragmatic suggestions for improving housing affordability in Australia.
5 things to know:
Weaker-than-expected factory activity data in the US added to hopes for a mid-year rate cut by the Federal Reserve, ANZ Economist Bansi Madhavani says. Market pricing for a July cut shifted to a 53% chance from 43% earlier. The ECB looks on track to cut rates in June and the Bank of England in August following weaker PMI surveys. Wall Street rallied and oil rose 1%.
Australia’s March quarter CPI data due today is being watched for sticky domestic and services inflation. ANZ Senior Economist Catherine Birch is forecasting annual CPI to fall to 3.5% from 4.1%.
Singapore’s annual inflation was weaker than expected in March, falling from 3.4% to 2.7%. Core inflation fell half a percent to 3.1%. Despite that, ANZ Head of Asia Research Khoon Goh says the Monetary Authority of Singapore looks set to hold monetary policy through the year.
The Bank of Indonesia is expected to hold its key policy rate at 6% when it meets later today. However, ANZ Chief Economist for Southeast Asia and India, Sanjay Mathur says recent currency volatility means a hike is not off the table.
Market consensus for South Korea’s March quarter GDP is for 2.6% growth, up from 2.2% in December. ANZ Economist Krystal Tan is forecasting 2.4%. She says strong chip exports look set to counter sluggish domestic retail sales.
Cheers
Bernard
PS: Catch you again on Friday after tomorrow’s ANZAC day public holiday here in Australia and New Zealand, with coverage of key US GDP and core PCE readings due on Thursday night.
