US stocks and oil bounce on lower US inflation and another cut in tariffs on China, sending the Aussie and Kiwi dollars up around 1.5% overnight. Lower inflation in India sets a path for a June rate cut. And consumer confidence rises again in Australia.
In our deep-dive interview, ANZ Economist Vicky Xiao Zhou analyses the US-China trade deal, and what to expect next.
5 things to know in 5 minutes:
US markets bounced overnight as lower-than-expected inflation and further easing in US-China trade tensions took risk off the table for investors. ANZ Economist Bansi Madhavani says progress on bringing US inflation down has been striking, after April headline and core CPI printed below forecast at 0.2%.
Australian consumer confidence rose for the second week in a row last week to be at its highest level since the RBA’s February rate cut, sitting at 88.3 points. ANZ Economist Sophia Angala says the lift has been led by households’ confidence in financial and economic conditions over the next year.
Weaker profitability drove reported Australian business conditions down slightly in April, according to NAB’s survey. Headline confidence improved, but remained negative. ANZ Senior Economist Adelaide Timbrell says purchase cost and retail price growth projections did pick up slightly.
In New Zealand, ANZ’s Truckometer index showed heavy traffic movements rose 2.7% in April to be up 1.7% annually, while light traffic rose slightly to be flat year-on-year. ANZ New Zealand Chief Economist Sharon Zollner says the production side of the economy is picking up, led by agriculture.
India’s headline CPI inflation dipped to 3.16% in April - its lowest since July 2019. ANZ Economist Dhiraj Nim says while that supports the Reserve Bank of India’s ability to cut rates in June, an unexpected rise in core inflation to 4.2% throws some uncertainty into the mix for later cuts.
Cheers,
Bernard
PS: Catch you tomorrow with what Australian wage data today could mean for the Reserve Bank of Australia’s rate decision next week.
