US rate cut optimism is growing with soft US labour market data. The RBA was less hawkish than expected, but won’t rule anything in or out. Australian consumers are really feeling the pinch. Inflation stays on target in Taiwan and the Philippines.
In our bonus deep dive interview, ANZ Senior Commodities Strategist Daniel Hynes says stronger-than-expected Chinese economic data is underpinning global commodity prices.
5 things to know:
The RBA yesterday left its key policy rate on hold at 4.35%. ANZ Head of Australian Economics Adam Boyton says the RBA was less hawkish than expected, even while lifting its inflation forecasts.
Australian retail volumes fell 0.4% in Q1, the fifth fall in six quarters. ANZ Economist Maddy Dunk says ANZ-Roy Morgan Consumer Confidence was also down.
Adam says weaker consumer spending data is posing a conundrum for the RBA as it grapples with sticky inflation.
RBA Governor Michele Bullock said in her press conference that a rate rise was considered, reiterating the RBA was not ruling anything in or out. The less-hawkish-than-expected statement meant markets lowered expectations of hikes.
Taiwan’s annual CPI inflation of 1.95% in April was below expectations and took pressure off its central bank to hike rates again in June. ANZ Economist Krystal Tan says a lower-than-expected 3.8% annual CPI in the Philippines shouldn’t raise expectations for monetary policy easing there.
Cheers
Bernard
PS: Catch you tomorrow with a look at what the Bank of England and Malaysia’s central bank might do with rates.
