Fed Chair Jerome Powell supports rate cut bets by citing progress on inflation and jobs, although stronger jobs data tempers the market reaction. The RBA’s board minutes show a hike is on the table, and New Zealand price pressures ease.
In our bonus deep dive interview, ANZ Senior Commodity Analyst Daniel Hynes looks at how commodity prices are generally boosted during rate cutting cycles.
5 things to know:
US rate cut bets were supported by comments from Fed Chair Jerome Powell overnight citing progress on inflation and a better balance in the jobs market. ANZ Economist Bansi Madhavani says stronger-than-expected job openings data while Powell was speaking dented the fall in US Treasury yields.
The Reserve Bank of Australia’s June meeting board minutes indicate Q2 CPI data at the end of July will be critical for gauging the next interest rate move. ANZ Head of Australian Economics Adam Boyton says there was no smoking gun pointing to a hike at the RBA’s August meeting, but enough to suggest the next move still could be a hike.
In New Zealand, the NZIER’s Q2 business opinion survey showed weaker confidence and price pressures. ANZ Senior Economist Miles Workman says the Reserve Bank should certainly be able to cut rates earlier than August 2025, which it signalled in May.
Europe’s annual CPI inflation rate eased slightly to 2.4% in June, although core inflation rose and services inflation remained sticky at 4.1%. Bansi says comments from ECB President Christine Lagarde overnight indicate the ECB wants more time and data to be certain on the inflation outlook before its next cut.
South Korea’s annual CPI inflation eased to 2.4% in June from 2.7% in May - slower than expected. Core inflation held at 2.2%. ANZ Asia Economist Krystal Tan says the pullback was broad-based.
Cheers
Bernard
PS: Catch you tomorrow with what today’s retail sales data says about demand in the Australian economy.
