RBA sends strong inflation warning

Just briefly in this morning's #5in5withANZ podcast below:

Markets were mixed ahead of key US jobs figures tonight. The RBA Governor talks tough in the fight against inflation. Malaysia keeps rates on hold, with lower inflation forecast, while Thailand’s annual CPI inflation rate falls to just 0.35%.

5 things in 5 minutes:

1. Markets were mixed overnight ahead of key US jobs data. ANZ Head of G3 Economics Brian Martin says the market will watch Non-Farm Payrolls data to see whether the Fed might start easing with a 50 basis point cut to rates. The consensus forecasts are for 165,000 new jobs and 4.2% unemployment.
2. Reserve Bank of Australia Governor @Michele Bullock yesterday sent out a tough message on inflation, warning that the ongoing high rates required to quell price rises might force some homeowners to sell up. ANZ Senior Rates Strategist Jack Chambers says the speech backed ANZ Research’s view that rates will be on hold until February.
3. The gap between Australia’s exports over its imports rose A$600 million to A$6 billion in July from June. But ANZ Economist Madeline Dunk points to signs China’s weakening economy is affecting demand for key Australian products.
4. Malaysia’s central bank - the BNM - kept rates on hold yesterday at 3%, and talked up the economy’s strength while revising down its inflation projections. ANZ Economist Arindam Chakraborty sees rates on hold through 2024.
5. Thailand’s annual CPI slowed to just 0.35% in August. ANZ Economist Krystal Tan says the dip is likely to be temporary, with inflation set to return to the Bank of Thailand’s 1-3% target band within the year.

In our bonus deep dive interview:

ANZ Economist Henry Russell reviews how New Zealand’s housing headwinds might keep the market from repeating previous surges as interest rates fall.

Cheers

Bernard

PS: Catch you next week with what those US non-farm payrolls jobs figures might mean for Fed rate cuts.