US inflation continues to come in low as FOMC members approach their next rates decision; Australian consumer confidence falls after the RBA holds; China’s economy outpaces in Q2, and India’s exports and imports both fall in June.
In our deep dive interview, ANZ Head of FX Research Mahjabeen Zaman looks at how the Australian dollar has been trading in line with a broader array of Asian currencies than just China’s CNH.
5 things to know in 5 minutes:
US core CPI inflation rose 0.2% in June - up slightly from May, but less than expected. Headline inflation rose 0.3%. ANZ Economist Bansi Madhavani says overall price pressure remains benign, but it would still be wise for the FOMC to wait before cutting rates. Meanwhile, the US 30-year Treasury yield ticked over 5% overnight.
China’s economy grew 5.2% in the second quarter from a year ago - down from 5.4% in Q1 but ahead of expectations. ANZ Senior China Strategist Zhaopeng Xing says the growth was led by exports to non-US partners.
ANZ Roy Morgan Consumer Confidence fell 2.1 points last week to 86.5 as short and medium-term economic confidence headed south. ANZ Economist Sophia Angala says the Reserve Bank of Australia’s unexpected decision to hold interest rates was a factor.
Sophia says expected rate cuts - when they do come later this year - should help to boost confidence and spending.
India’s trade deficit narrowed slightly in June from May as import values fell 3.7% - down faster than exports, which fell 0.1%. ANZ Economist Dhiraj Nim says high-tech exports performed well, although this was offset by weakness in mid-and-low-tech goods.
Cheers,
Bernard.
PS: Catch you tomorrow with a look ahead to Australia’s June jobs numbers.
