Soft consumer spending unlikely to move RBA

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

US job vacancies were weaker than anyone expected in July, boosting chances of a larger cut by the Fed in two weeks. Australia’s economy expands, although household spending weakens, as does China’s services sector.

5 things to know in 5 minutes:

1. US Job Openings (Jolts) fell below expectations to their lowest level in three years. That prompted US Treasury yields to fall. Bets for a 50 bps cut by the Fed rose to 40% from 30% yesterday. ANZ Head of G3 Economics Brian Martin expects the Fed to kick off its easing cycle with a 25 bps cut.
2. Australia’s economy grew 0.2% in the April-June quarter, in line with market expectations. Annual growth of 1% was boosted by previous revisions. ANZ Senior Economist Catherine Birch says the annual result was the weakest since the 1990s recession, outside of the pandemic.
3. Catherine says the data is unlikely to shift the Reserve Bank of Australia’s thinking on interest rates, despite household spending falling 0.2%, which was weaker than the central bank’s forecast.
4. Further weakness in China’s economy has prompted more calls for policy support. The August Services Purchasing Managers’ Index fell to 51.6 in August - below forecast. ANZ Senior China Strategist Zhaopeng Xing says the result adds downside risk to GDP after soft manufacturing data this week.
5. Prices at New Zealand’s regular dairy product auction fell 0.4% yesterday morning, prompting some Kiwi dollar weakness. ANZ Senior Economist Miles Workman says the fall came after a 5.5% rise at the previous auction.

In our bonus deep dive interview:

ANZ Senior Commodity Strategist Daniel Hynes sets out the challenges OPEC producers are facing from weakening global activity.

Cheers

Bernard

PS: Catch you tomorrow with a look ahead to key US non-farm payrolls jobs figures.

#5in5withANZ also free daily directly on Spotify, Apple Podcasts, YouTube and Substackfrom 6 am Sydney/Melbourne time. FYI ANZ Institutional and Richard Yetsenga