US core inflation was stronger than expected in February. Bond yields rose, but stock markets shrugged it off. India’s CPI was held up by food prices. Australian businesses see price rises, while consumers feel better. New Zealand retail spending drops.
In our bonus deep dive interview, ANZ Chief Economist for Greater China Raymond Yeung explains how China’s property supply is running well ahead of demand, with three-and-a-half years worth of unsold residential property piling up as demand weakens.
5 things to know:
Bond yields rose around 6 bps after slightly stronger-than-expected core US inflation data overnight, but the S&P 500 was up about 0.5% at 5am Sydney/Melbourne time. The A$ fell 0.3% to 65.97 US cents. The NZ$ fell to 61.45. ANZ Head of G3 Economics Brian Martin says services drove US core inflation up.
Retail inflation in India came in at 5.09%, flat from January and marginally above the consensus forecast. ANZ Economist Dhiraj Nim says core inflation fell to about 3.4% annually, but food price inflation remained elevated at 7.7%.
Business conditions rose in Australia in February as trading conditions and profitability improved, although the headline NAB Business Confidence measure fell slightly. ANZ Economist Maddy Dunk says the RBA is watching businesses’ price increases. They were 1.3% in February, up from 1.1% in January.
The ANZ-Roy Morgan consumer confidence index rose slightly in Australia last week. ANZ Senior Economist Adelaide Timbrell says future financial conditions confidence jumped, with more people positive than negative for the first time since January 2023.
NZ retail card spending fell 1.8% in February, led by lower spending on fuel, clothing and consumables. ANZ Senior Economist Miles Workman says inflation and rising interest rates are containing household spending.
Cheers
Bernard
PS: Catch you on tomorrow with a more in depth look at the clues to where China’s property market is heading following the National Peoples’ Congress.
