Firm US retail sales ease recession fear

Just briefly in the #5in5withANZ podcast below:

Strong US retail sales ease recession fears, adding slightly to expectations of a 25 basis point cut by the Fed. Australia’s consumer confidence jumps. Singapore’s chip exports get a boost, and Bank Indonesia faces a tough rates decision today.

5 things to know in 5 minutes

1. Fears of a US recession eased overnight as stronger-than-expected August retail sales numbers, along with solid industrial output and manufacturing data, pointed to solid activity, says ANZ Head of G3 Economics Brian Martin.
2. Now all eyes are on the Federal Open Markets Committee’s rates announcement on Thursday morning Sydney/Melbourne time, and how much support it believes the US jobs market requires. Regardless of whether it is a 25 or 50 basis point cut, Brian says the crucial focus is how much rates look set to fall over the cycle.
3. Singapore’s non-oil domestic export growth of 10.7% from a year ago was below expectations, but there were some welcome signs. ANZ Head of Asia Research Khoon Goh says electronics exports finally fired up, led by chips.
4. ANZ-Roy Morgan Australian consumer confidence rose to its highest level since mid-July last week. ANZ Economist Madeline Dunk says the lift was broad based, although levels still haven’t hit the highs expected before the Stage 3 tax cuts kicked in mid-year.
5. The People’s Bank of China decides on its one-year lending rate today. ANZ Research is expecting a 10 basis point reduction to 2.20%. Meanwhile, Bank Indonesia is reviewing its key policy rate. ANZ Economist Krystal Tan expects a hold at 6.25%.

In our bonus deep dive interview:

ANZ Head of Geopolitical Risk Cameron Mitchell explains why themes of de-globalisation and the de-coupling of the US and Chinese economies should be looked at through a different lens.

Cheers

Bernard

PS: Catch you tomorrow with the US Federal Open Markets Committee’s rate decision.