Stock markets were stable overnight although the volatility may be short-lived. The Reserve Bank of Australia opens up for a May rate cut, while tariff uncertainty starts to show through in Australian consumer confidence.
In the second part of a bonus Deep Dive interview on the US dollar’s reserve currency status, ANZ’s Senior Rates Strategist Jack Chambers explains why the Aussie dollar’s relationship with the US dollar is so important for Australian pension funds.
5 things to know in 5 minutes:
Stock markets were mixed overnight as investors were buoyed by strong US bank earnings reports while they searched for clues on the Trump administration’s next tariff moves. ANZ Economist Bansi Madhavani says the market stabilisation may be a temporary reprieve, with pending US reports on pharmaceuticals and semiconductor trade hanging over sentiment.
The Reserve Bank of Australia’s 1 April board meeting minutes released yesterday support ANZ Research’s view that rates could be cut in May, July and August, says ANZ Senior Economist Adelaide Timbrell. Adelaide says the minutes suggest the RBA is not necessarily looking at tariff developments as an inflationary shock.
Adelaide says a speech last week by the RBA Governor indicated the key focus for the central bank will be how global uncertainty affects decision-making of Australian businesses and households.
ANZ Roy Morgan Australian Consumer Confidence is showing signs that the global uncertainty is transmitting through into local confidence, with the index dropping 2.6 points last week to 84.2. ANZ Economist Sophia Angala says short term confidence - in the next 12 months - led the drop.
China’s GDP data for the first three months of the year out today might be considered old news with those US tariffs kicking in from Q2. ANZ Economist Vicky Xiao Zhao is forecasting an annual rate of 5.2%, to be followed by slower growth in the second half of the year.
Cheers,
Bernard
PS: Catch you tomorrow with analysis of how China’s economy was performing ahead of those major US tariffs kicking in.
