Tariff fears unnerving US economy

Briefly in today's #5in5withANZ podcast below

Markets react cautiously to Germany’s new Government. The US economy is softening because of tariff uncertainty. China’s central bank is using off balance sheet tools to intervene in markets, and New Zealand’s retail sector has perked up.

5 things to know in 5 minutes

1. Global markets are mixed after Germany’s centre-right parties won power in elections, as broadly expected.The bigger news on markets was a Dallas Fed survey showing another sign of weakening activity in the US economy as doubts about Trump’s tariffs set in, says ANZ Head of G3 Economics Brian Martin .
2. Germany’s election results may not have moved markets, but they are important, with the potential for the new centre-right Government to unleash the ‘debt brake’, says Brian, although the detail won’t be clear for at least six months.
3. The euro initially rose on the election results, but has slipped back because those tariff concerns remain unresolved, says Brian.
4. In New Zealand, retail trade volumes rose a stronger-than-expected 0.9% in the December quarter, suggesting a recovery in the consumer economy has finally begun, says ANZ New Zealand economist Henry Russell .
5. The People’s Bank of China is increasingly using a lot of off-balance-sheet tools to intervene quietly and tangentially in stock and bond markets, says ANZ Senior China Strategist Zhaopeng Xing .

In our bonus deep dive interview

ANZ’s Chief Economist for Asia, Sanjay Mathur , has taken a closer look at the importance of household consumption in Asia’s economies, especially in the face of tariff headwinds to their exports .

Cheers,

Bernard

PS: Catch you tomorrrow with a preview of Australia’s partial inflation indicators for January.