US markets jump on stronger consumer confidence and intensified US-EU trade talks. Australian consumer confidence drops despite the RBA’s rate cut last week. Australian annual inflation for April may tick up, and the Reserve Bank of New Zealand is set to ease policy later today.
In our deep-dive interview, ANZ’s Head of Asia Research Khoon Goh investigates the Singapore dollar’s even safer-haven status as the US dollar wobbles.
5 things to know in 5 minutes:
US stock markets jumped overnight on news the US and EU were intensifying trade talks, and on the first rise in US Conference Board consumer confidence for five months in May. ANZ Head of G3 Economics Brian Martin says a key ‘expectations’ measure is still in recession territory, despite the jump.
Australia’s April CPI inflation reading today could see the annual rate tick up to 2.5% from 2.4%, according to ANZ Research. The market expectation is 2.2%. ANZ Senior Economist Adelaide Timbrell is looking to see if electricity pricing and rents offset disinflation in household goods, clothing and footwear.
Adelaide says while an annual read of 2.5% would not be a barrier for a July interest rate cut by the Reserve Bank of Australia, ANZ Research is picking the next cut in August as soft economic data holds up enough to allow the RBA to pause at its next meeting.
ANZ Roy Morgan Australia Consumer Confidence fell 1.8 points last week to 87.0, led by a decline in short-term economic confidence. ANZ Economist Sophia Angala points out though that the four-week moving average of the series is at its highest level since mid-2022.
The Yen jumped yesterday to 142 to the US dollar, following comments from the Bank of Japan Governor indicating policy makers were still considering rate rises. It was back in the 144 range this morning. ANZ FX analyst Felix Ryan says Governor Ueda indicated that as long as price and growth forecasts were being met, the BoJ would look to lift rates from the current 0.5%.
Cheers,
Bernard
PS: Catch you tomorrow with analysis of the Reserve Bank of New Zealand’s rate decision today, which ANZ Research and the market expect will be a 25 basis point cut to 3.25%.
