US September hike expectations fall on Fed comments - so stocks rise. The Yen strengthens on BoJ hike bets. Australia imports more data processing tech. Higher import prices hit New Zealand’s terms of trade.

In our deep-dive interview, ANZ New Zealand Chief Economist Sharon Zollner reviews where New Zealand’s economy is headed after the RBNZ hiked rates again this week.

5 things to know in 5 minutes:

1. Fed September hike bets fell to about 50% after Fed Governor Waller said current settings could get inflation back to 2%. In contrast, expectations are firming that the Bank of Japan will hike in September, says ANZ Head of FX Research Mahjabeen Zaman. The Yen strengthened overnight.

2. Malaysia’s central bank held rates at 2.75% yesterday. ANZ Chief Economist for Southeast Asia and India Sanjay Mathur says subdued inflation allowed for the hold - although price pressures are coming. ANZ Research expects a 25 basis point hike to 3% in November.

3. Australia’s goods trade surplus narrowed by $400 million in July to $1.9 billion. ANZ Economist Sophia Angala says exports declined 3.3%, driven by a pull-back in non-monetary gold. Imports fell by 2.5%, but within that, capital goods imports rose 6.7%, led by data processing equipment.

4. New Zealand’s merchandise terms of trade fell 9% in Q2 as import prices rose faster than export prices. Meanwhile, ANZ’s New Zealand Commodity Price Index fell 0.4% in world terms in August. ANZ Agri Economist Matt Dilly says strength in milk powder was offset by falls in beef and butter prices.

5. Matt says beef has been affected by efforts of the US government to reduce prices.

Cheers,

Alex, standing in for Bernard, who will be back from Monday.

PS: Catch you next week with what US jobs data tonight could mean for the Fed.

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Global bond yields take a breather and US stocks rise. Australia’s growth eased in the first half of 2026, but a November rate hike remains on the cards. The RBNZ lifts rates but the Kiwi drops as guidance changes.

In our deep-dive interview, ANZ Head of Australian Economics Adam Boyton analyses how Australia’s economy was placed after the second quarter.

5 things to know in 5 minutes:

1. Global bond yields took a breather and US equities rose as traders tempered inflation fears - oil rose less than 1% even as the Middle East conflict intensified. ANZ Senior Rates Strategist Jack Chambers says there’s been a shift in recent weeks in terms of what is driving Government bonds, with a focus back on oil prices driving inflation.

2. Australia’s economy grew 0.4% in the second quarter and, with revisions, was up 2.1% over the year. ANZ Head of Australian Economics Adam Boyton says the key message is that activity in the first half of 2026 slowed relative to how it ended 2025.

3. Australian rates and RBA hike expectations firmed after the data was published. Jack says that’s unusual after a GDP release.

4. The Reserve Bank of New Zealand hiked the OCR 25 basis points to 2.75% yesterday. That was as expected. But ANZ New Zealand Chief Economist Sharon Zollner says the RBNZ tempered forward guidance, indicating an October hike was less likely amid a hiking cycle.

5. The New Zealand dollar and short-term rates dropped. ANZ Senior Strategist David Croy says that contributed to a further steepening in the New Zealand yield curve.

Cheers,

Alex, standing in for Bernard, who will be back from Monday.

PS: Catch you tomorrow with more from Sharon on the path ahead for New Zealand’s economy.

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Oil jumps and Government bond yields rise on inflation worries as the US launches new Iran strikes. ANZ Research upgrades its Australian Q2 GDP forecast. And the RBNZ is expected to hike rates today.

In our deep-dive interview, ANZ Group Chief Economist Richard Yetsenga reviews the economic opportunities from Australia’s data centre construction boom.

5 things to know in 5 minutes:

1. Brent crude rose nearly 7% and government bond yields surged as more US strikes on Iran stoked inflation worries. This comes as markets look to the Fed’s rate decision this month after Fed Chair Kevin Warsh’s hawkish Jackson Hole speech, says ANZ Head of G3 Economics Brian Martin.

2. ANZ Research has upgraded its forecast for Q2 GDP slightly to 0.5% for the quarter and 2% for the year, following final partial data this week. ANZ Head of Australian Economics Adam Boyton says there should be more strength on the income side of the accounts, but less on the demand side.

3. Higher July trimmed mean inflation - the RBA’s preferred measure - was likely behind a drop in ANZ-Roy Morgan Consumer Confidence last week, says ANZ Economist Sophia Angala. Headline confidence fell 2.6 points to 74.9 after trending up for most of August.

4. Australia’s housing market continues to slow, with capital city house prices falling 1.1% in August. Meanwhile, building approvals dropped 3.6% in July although that was after a strong June, Sophia says.

5. The Reserve Bank of New Zealand today is expected to hike the Official Cash Rate 25 basis points to 2.75%. ANZ New Zealand Chief Economist Sharon Zollner says the move has been well-signalled.

Cheers,

Alex, standing in for Bernard, who will be back from Monday.

PS: Catch you tomorrow with reviews of Australia’s Q2 GDP and the RBNZ rate decision.

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Brent jumps 5% on renewed conflict in the Middle East. Stronger company profits mean upside risk to Australia’s Q2 GDP. Kiwi businesses report mixed inflation views ahead of the RBNZ’s rate call.

In our deep-dive interview, ANZ FX Analyst Preksha Jain analyses whether dividend conversions, off the back of the ASX reporting season, could affect the Aussie as US dollar payments are converted into AUD by domestic investors.

5 things to know in 5 minutes:

1. Brent crude rose 5% and longer Treasury yields climbed overnight as traders worried about a new flare up in the Middle East conflict. Markets also continue to digest signals from Fed chair Kevin Warsh that he’s prepared to raise rates to curb inflation, says ANZ Economist Bansi Madhavani.

2. Australia’s business indicators data were stronger than expected in the second quarter, boosted by higher company profits - up 1.8% in the quarter and 7.4% year on year. ANZ Head of Australian Economics Adam Boyton says the data provides upside risk for Wednesday’s Q2 GDP.

3. The business indicators weren’t wasn’t all one-way though. Adam says a 5.2% fall in retail profits points to variable conditions across the economy.

4. ANZ’s New Zealand Business Outlook held up in August - down only 2 points at a still-high 54. ANZ New Zealand Chief Economist Sharon Zollner says a key read for the Reserve Bank of New Zealand was that inflation indicators were mixed, ahead of its rate decision on Wednesday.

5. Europe’s August CPI inflation tonight will give a read on whether the ECB should hike rates this month. ANZ FX Analyst Preksha Jain says consensus is for annual inflation of 3.3% in August, up from 2.9% in July.

Cheers,

Alex, standing in for Bernard.

PS: Catch you tomorrow with the final partial data for Australia’s Q2 GDP and a look ahead to the RBNZ rate decision.

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The Fed Chair delivers a hawkish Jackson Hole speech - US rate hike bets firm up. But jobs data this week could ease the pressure. New Zealand consumer inflation expectations stay steady. Australia has Q2 GDP this week.

In our deep-dive interview, ANZ Head of FX Research Mahjabeen Zaman explains the implications of Kevin Warsh’s speech for rate expectations and currencies.

5 things to know in 5 minutes:

1. US Fed Chair Kevin Warsh on Friday delivered what was perceived by markets as a hawkish speech at the Jackson Hole symposium for central bankers. ANZ Head of FX Research Mahjabeen Zaman says Warsh’s vow to tame inflation caused markets to raise bets on a rate hike next month.

2. In New Zealand, ANZ Consumer Confidence was steady in August - down just one point at 98. ANZ New Zealand Chief Economist Sharon Zollner says that’s still sub-par. But she says a glass-half-full view is that confidence is 18 points higher than its April low. Inflation expectations remained steady.

3. In Japan on Friday, the August Tokyo CPI kept showing the price pressures needed for the Bank of Japan to hike rates again, Mahjabeen says. Excluding fresh food it rose 1.8% from a year ago, compared to 1.7% in July.

4. The week ahead for Australia includes Q2 GDP data. ANZ Research is forecasting a 0.4% quarterly rise, and 1.9% for the year, to be finalised after final partial data this week, says ANZ Group Chief Economist Richard Yetsenga.

5. The numbers will come after ANZ Research last week updated its RBA call to another hike in November. Richard says last week’s stronger July CPI inflation data was a key catalyst to the call, but not the only one.

Cheers,

Alex, standing in for Bernard.

PS: Catch you tomorrow with Australian business indicators and private sector credit data - both key for Q2 GDP.

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US Treasuries are steady ahead of the Fed chair’s Jackson Hole speech; Australian household spending jumps - supporting ANZ Research’s November rate hike call. Korea and the Philippines hike rates.

In our deep-dive interview, ANZ Senior Rates Strategist Jack Chambers explains why it’s so important to keep an eye on longer-dated US Treasury yields.

5 things to know in 5 minutes:

1. US Treasuries were steady overnight ahead of US Fed chair Kevin Warsh’s much-anticipated Jackson Hole speech. ANZ Research expects Warsh to emphasise the Fed’s commitment to returning inflation to target and outline the strategic challenges facing monetary policy. ANZ Commodities Strategist Soni Kumari says markets - including Gold traders - are looking for specific signals.

2. Australian household spending rose 1.1% in July - well above market expectations for a 0.3% rise, and with annual growth at 7%. ANZ Economist Sophia Angala says discretionary spending led the rise, which keeps the pressure on the RBA to hike rates again in November.

3. Australian capex spending took a breather in the second quarter, falling 3.6% from Q1. But it was still up nearly 11% over the year due to data centre investment. ANZ Economist Jasmine Zheng says, looking ahead, capital investment intentions remain strong.

4. Bank of Korea hiked rates for the second meeting in a row, as expected, by 25 basis points to 3% on stronger inflation and activity. ANZ Chief Economist for Southeast Asia and India Sanjay Mathur says there is more to come.

5. The Philippines central bank, the BSP, also hiked rates by 25 basis points to 5%. ANZ FX Strategist Kausani Basak says the move was pre-emptive ahead of expected food price effects from the El Nino weather pattern and minimum wage increases.

Cheers,

Alex, standing in for Bernard.

PS: Catch you next week with reaction to Fed Chair Kevin Warsh’s Jackson Hole speech.

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Australia’s July CPI is stronger than expected, after RBA minutes highlighted concerns about prices. So ANZ Research has changed its rate call to another hike in November. US inflation backs the Fed to hold.

In our deep-dive interview, ANZ Economist Maddy Dunk analyses what was behind the strength in Australia’s July CPI data.

5 things to know in 5 minutes:

1. Australia’s trimmed mean inflation was 0.5% in July - above market expectations for 0.3%. ANZ Economist Maddy Dunk says the data, along with RBA commentary in recent days, means ANZ Research has changed its rate call from ‘on hold’ to expecting another hike in November to 4.60%.

2. Maddy says there are several reasons why the rate hike would be in November and not the upcoming September meeting.

3. Meanwhile, in the US, July core PCE inflation was 0.2% - in line with expectations. ANZ Economist Henry Russell says that supports the Fed to hold rates at its September meeting.

4. More inflation pressure for the Bank of Japan, after July’s services producer price inflation rose 3.6% from a year ago - above expectations. ANZ Head of FX Research Mahjabeen Zaman says a weaker yen through the year has contributed to higher PPI readings.

5. Also out in Australia yesterday was Q2 construction data showing activity fell 2.1% from Q1. That was weaker than expected. ANZ Economist Jasmine Zheng says engineering construction led the decline - down 6%. But other components did rise.

Cheers,

Alex, standing in for Bernard.

PS: Catch you tomorrow with the latest on Australian household spending.

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US Treasury yields drop as attention turns to PCE inflation data tonight. RBA August meeting minutes lean to the hawkish side. Australia’s July CPI inflation today will be watched for any upside surprise.

In our deep-dive interview, ANZ Commodities Strategist Soni Kumari reviews how Gold has been tracking as US rate hike expectations change, fiscal concerns rise and the Middle East conflict continues.

5 things to know in 5 minutes:

1. US Treasury yields dropped as oil prices fell overnight on reduced fears of escalation of the Middle East conflict. This comes ahead of the next big piece of US data tonight: July PCE inflation. ANZ Head of G3 Economics Brian Martin says the market is expecting a monthly headline print of 0.1% and 3.6% year-on-year, and for core inflation of 0.2% and 3.3% year-on-year.

2. ANZ-Roy Morgan Australian Consumer Confidence hit its highest since February last week, up 1 point to 77.5. ANZ Economist Maddy Dunk says the improvement was driven by a lift in how households were feeling about their personal financial situations, despite a rise in inflation expectations.

3. Attention now turns to Australia’s July CPI data out later today. Maddy is forecasting a 0.3% lift in the closely watched trimmed mean measure.

4. The Reserve Bank of Australia released the minutes of its August board meeting yesterday - where rates were held at 4.35%. ANZ Senior Rates Strategist Jack Chambers says the minutes were more hawkish than the post-decision statement.

5. Jack says the minutes didn’t shift ANZ Research’s RBA rate call of on hold until cuts in the second half of 2027. But he says Q3 inflation data could mean the November meeting is a live one.

Cheers,

Alex, standing in for Bernard.

PS: Catch you tomorrow with what that July CPI data could mean for the RBA.

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Oil and Treasury yields drop as the US sets out more Iran sanctions; Singapore’s core inflation jumps but was weaker than expected. New Zealand retail sales drop, highlighting a stalled economy in Q2.

In our deep-dive interview, ANZ Senior Asia Rates Strategist Jennifer Kusuma reviews how Asia sovereign risks are tracking amid the Middle East conflict and bond market uncertainty.

5 things to know in 5 minutes:

1. Oil and Treasury yields dropped overnight as the US announced new economic sanctions on Iran. ANZ Head of G3 Economics Brian Martin says it was quieter in equity markets, though, as traders looked out for further guidance on the US fiscal situation from Treasury Secretary Scott Bessent and to Fed chair Kevin Warsh’s Jackson Hole speech Friday.

2. Singapore’s core inflation hit its highest level in four years, rising to 2% annually in July from 1.6% in June. But it still came in below expectations, says ANZ Head of Asia Research Khoon Goh.

3. New Zealand retail sales volumes fell 0.5% in the June quarter as fuel retailing slumped after the effects of higher prices were removed. ANZ Senior Economist Matthew Galt says the economy definitely stalled in the second quarter, although the retail activity data probably overstates the weakness.

4. Matthew says New Zealand’s economic momentum has started to recover since the middle of the year as the oil price shock wore off.

5. The Australian dollar has generally benefitted from the weaker US dollar story recently. This week though, July CPI data will be a key catalyst for the Aussie. ANZ Head of FX Research Mahjabeen Zaman says the focus will be on whether the trimmed mean print beats expectations ANZ Research is forecasting a 0.3% rise in the month.

Cheers,

Alex, standing in for Bernard.

PS: Catch you tomorrow with a review of the RBA’s August board minutes, out later today.

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US business activity rises in August as price growth eases. The US dollar settles lower after last week’s Treasury bond market intervention. Stronger inflation boosts Bank of Japan rate hike expectations.

In our deep-dive interview, ANZ Group Chief Economist Richard Yetsenga reviews the US Treasury’s moves last week to bring borrowing costs down, and the implications for Australia and New Zealand.

5 things to know in 5 minutes:

1. There was some good news for the US economy on Friday. August flash PMI data showed business activity accelerated at its fastest pace in four years. ANZ Economist Bansi Madhavani says firms increased hiring, while the pace of price rises also eased.

2. The US dollar finished the week on the backfoot following the Treasury buyback announcement. ANZ Head of FX Research Mahjabeen Zaman says a key event this week for the dollar will be Fed chair Kevin Warsh’s Jackson Hole speech on Friday.

3. Mahjabeen says the US dollar appears to have stabilised at lower levels following the Treasury buyback announcement.

4. Japan’s flash PMI for August remained in expansion mode as new manufacturing orders hit their highest since 2018. Meanwhile, the national CPI rose 1.8% in July from a year ago - faster than June’s 1.6%, and in line with expectations. Mahjabeen says the data support a more aggressive pace of hikes by the Bank of Japan.

5. The key data in Australia this week is July CPI inflation. ANZ Research is forecasting the monthly trimmed mean to rise 0.3%, with the annual rate ticking down to 3.5% from 3.6% in June. ANZ Group Chief Economist Richard Yetsenga says it follows weaker labour market data last week, giving the Reserve Bank of Australia time.

Cheers,

Alex, standing in for Bernard.

PS: Catch you tomorrow with a look at the implications for the Aussie dollar from a stronger or weaker CPI print this week.

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Long Treasury yields are back up - the US is looking at what else it can do to get borrowing costs down. Australia’s labour market softens, taking pressure off the RBA. And Japan’s exports surge on AI demand.

In our deep-dive interview, ANZ Economist Vicky Xiao Zhou looks at what’s driving Asia’s AI tech export boom.

5 things to know in 5 minutes:

1. Longer-dated US Treasury yields rose overnight, reversing falls yesterday after the US Treasury announced the doubling of a buyback programme. The US Treasury Secretary Scott Bessent announced he was looking at additional measures to bring borrowing costs down. ANZ Head of FX Research Mahjabeen Zaman says the underlying issues driving US borrowing costs need to be addressed.

2. Australia’s unemployment rate edged up to 4.5% in July - in line with ANZ Research’s pick. Employment unexpectedly fell by nearly 16,000, although June’s jobs growth was revised up at the same time. ANZ Senior Rates Strategist Jack Chambers says there are signs of weakness showing through.

3. Jack says the labour market is not a source of upside inflation risk for the RBA at the moment.

4. China left key 1- and 5-year bank lending rates - or loan prime rates - on hold yesterday. The decision comes as markets look for how authorities will respond to weak July activity data, says ANZ Economist Vicky Xiao Zhou.

5. Japan’s exports grew 23.2% in the year to July - the fastest since 2022 and boosted partly by booming AI tech demand. But imports grew faster - by 27.8%, meaning the trade deficit widened, notes Mahjabeen.

Cheers,

Alex, standing in for Bernard.

PS: Catch you next week as we keep an eye on those long US Treasuries.

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The US Treasury doubles a bond buyback programme, sending long-term yields and the dollar down - the Aussie and Kiwi dollars both rise. Australia’s private sector wage growth is the weakest since 2021.

In our deep-dive interview, ANZ Chief Economist for Greater China Raymond Yeung dissects China’s weak July activity data.

5 things to know in 5 minutes:

1. The US Treasury sought to tackle longer-term borrowing costs overnight by announcing a doubling of a buyback plan for 10-30 year Treasuries. ANZ Economist Henry Russell says the move saw the 30 year-yield fall up to 10 basis points. The US dollar was also weaker.

2. Bank Indonesia left its policy rate on hold at 5.75%. ANZ Economist Dhiraj Nim says relative stability in the currency allowed for the pause, although another hike to 6% is still on the cards.

3. Australia’s wage inflation came in as expected in the second quarter, up 0.8% and 3.2% annually. That was the fifth quarter in a row of 0.8%. ANZ Economist Jasmine Zheng says private sector wages were only up 0.7% - the lowest since 2021.

4. The next key data on Australia’s labour market are July’s jobs figures today. Jasmine is expecting employment growth of 20,000 and for the unemployment rate to tick up to 4.5%.

5. Prices for New Zealand’s key dairy exports rose this week, with global dairy trade prices up 2.3% from two weeks ago. ANZ Agri Economist Matt Dilly says the strength came from skim milk powder, up 7%, and whole milk powder, up 3%.

Cheers,

Alex, standing in for Bernard.

PS: Catch you tomorrow with reaction to Australia’s July jobs data.

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Stocks fall as inflation fears rise. ANZ Research upgrades its Australian growth forecasts. And Australian consumers are more confident as RBA hikes appear off the table.

In our deep-dive interview, ANZ Senior Commodities Strategist Daniel Hynes analyses how diesel has become a crunch point in the global oil market.

5 things to know in 5 minutes:

1. ANZ Research has upgraded its Australian GDP forecasts for 2026 due to an improved outlook for household consumption. ANZ Head of Australian Economics Adam Boyton says the economy will still slow, but not by as much as previously thought.

2. Adam is expecting business investment to remain strong at seven percent both this year and next.

3. Australian consumers are also feeling better about the economy’s prospects. ANZ-Roy Morgan Australian Consumer Confidence rose last week to its highest level since March. ANZ Economist Maddy Dunk says this month’s rate hold by the RBA has helped settle nerves.

4. Attention in Australia now turns to second quarter wage data. ANZ Economist Jasmine Zheng expects growth of 0.8% in the quarter and 3.2% year-on-year. She says workers will be looking to preserve real wages.

5. The Reserve Bank of India surprised markets this week by ending an initiative to attract foreign currency inflows and boost the rupee a month early. ANZ Economist Dhiraj Nim says there are several reasons the RBI may have jettisoned the scheme, including that global factors are driving the rupee.

Cheers,

Alex, standing in for Bernard.

PS: Catch you tomorrow with what Australia’s wage data could mean for the RBA.

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The Bank of Japan is given food for thought from a weak GDP print. China’s activity slows sharply. Oil prices are back up around 3% on renewed conflict worries. New Zealand price pressures ease.

In our deep-dive interview, ANZ Economist Maddy Dunk explains why ANZ Research has cut its Australian house price forecasts.

5 things to know in 5 minutes:

1. Japan’s Q2 GDP was weaker than expected yesterday, growing 1.1% from a year ago from 1.9% previously. ANZ Head of FX Research Mahjabeen Zaman says the soft result comes as the Bank of Japan is weighing up whether to raise rates in September or October.

2. Oil prices were up about 3% overnight. ANZ Senior Commodities Analyst Daniel Hynes yesterday published a note analysing how diesel is becoming the key pressure point for the world economy.

3. China’s suite of July activity indicators yesterday were weaker than expected. ANZ Chief Economist for Greater China Raymond Yeung says authorities will be looking at whether to respond with monetary or fiscal policy - or both.

4. Some softness in New Zealand’s inflation pulse as selected prices came in weaker than expected in July. ANZ Senior Economist Miles Workman says this introduces some downside risk to ANZ Research’s forecast of Q3 CPI of 0.8%.

5. Thailand’s growth fell to 1.9% year-on-year in the second quarter from 2.8% in Q1. However, it was still a touch stronger than market expectations, says ANZ FX Analyst Kausani Basak.

Cheers,

Alex.

PS: Catch you tomorrow with a look ahead to Australia’s Q2 wage data.

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Fed hike pricing retreats further after weak US retail sales; Australian housing lending drops as the RBA looks for signs of reduced activity. New Zealand’s patchy recovery continues.

In our deep-dive interview, ANZ Group Chief Economist Richard Yetsenga analyses how the Fed is placed after last week’s US inflation data.

5 things to know in 5 minutes:

1. Fed rake hike pricing retreated further on Friday after weak US retail sales in July. US stocks dropped. Looking ahead, the focus in Australia this week is July jobs data on Thursday and Q2 wage data Wednesday. ANZ Group Chief Economist Richard Yetsenga expects a small tick up in the unemployment rate to 4.5%.

2. Perhaps in a sign of declining activity in Australia that the RBA is looking for, housing lending fell 5% in the second quarter. ANZ Economist Maddy Dunk says the housing market has attracted the RBA’s attention recently.

3. New Zealand’s manufacturing industry expanded at a slower pace in July, according to the BNZ-Business NZ PMI. But ANZ Senior Economist Miles Workman says all five subindices remained in expansionary territory.

4. Evidence that New Zealand is not experiencing a straight-line recovery was in migration data for June. ANZ Senior Economist Matthew Galt says net migration was slightly lower in the month: Large numbers of inflows continue to be nearly matched by outflows, particularly to Australia.

5. A brighter spot for the New Zealand economy has been international tourism - a key services export. Matthew says there has been a steady grind upwards over the past few years.

Cheers,

Alex.

PS: Catch you tomorrow with a deep dive into ANZ Research’s new Australian house price forecasts.

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There’s more pressure off the Fed to hike as US producer prices ease more than expected. New Zealand inflation expectations fall. And Japan’s government is reported to favour a near term rate hike.

In our deep-dive interview, ANZ FX Analyst Kausani Basak analyses the implications of an investment surge in Thailand.

5 things to know in 5 minutes:

1. US producer price growth eased by more than expected in July, taking further pressure off the Fed to hike rates. The Producer Price index was flat in the month, and up 4.7% from a year ago, down from the 5.5% in June. ANZ Economist Bansi Madhavani says core PPI also decelerated.

2. New Zealand house prices were flat in July, to be down 0.7% from a year ago, according to the Real Estate Institute. ANZ Senior Economist Matthew Galt says the month matched what we’ve seen over the past three years.

3. New Zealand quarterly inflation expectations dropped in the third quarter, with the 1-year ahead falling from 3.41% in Q2 to 2.60%. The important two-year ahead measure eased from 2.53% to 2.34%. ANZ Senior Economist Miles Workman says the survey respondents expect the OCR to rise from here.

4. Japan’s producer price inflation was softer than expected in July, but remained elevated annually at above 7%. ANZ Head of FX Research Mahjabeen Zaman says that presents a pretty hawkish backdrop to the Bank of Japan’s September meeting.

5. The Japanese government was reported overnight as being in favour of a near-term Bank of Japan rate hike. It comes as Dollar-Yen has drifted to around 159 in recent days, after sitting at 157 following joint Japanese-US intervention to strengthen the Yen. Mahjabeen says officials will be keeping an eye on the currency if Dollar-Yen goes over 160 again.

Cheers,

Alex.

PS: Catch you next week with Australian July unemployment and Q2 wages data.

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US inflation comes in as expected - Fed rate hike expectations fall. Bank of Korea says more rate rises are likely. And ANZ Research downgrades its Australian house price forecasts.

In our deep-dive interview, ANZ Economist Aaron Luk explains how Australia’s unemployment rate has become less sensitive to growth in recent years.

5 things to know in 5 minutes:

1. US CPI inflation was 0.1% in July and core inflation 0.2% - in line with expectations. ANZ Economist Bansi Madhavani says it’s encouraging to see core price growth maintain a downward trend. Annual core inflation of 2.5% was the lowest since March 2021.

2. Bansi says market pricing for a September rate hike by the Fed eased from 50-50 to 40% after the data.

3. ANZ Research has downgraded its Australian capital city house price forecasts. ANZ Economist Maddy Dunk now sees pricing falling 4.3% in 2026, compared to the 2.1% fall forecast back in June.

4. Bank of Korea’s Deputy Governor says more rate hikes are likely as stronger growth pushes up inflation. ANZ Economist Krystal Tan says that fits with ANZ Research’s view that the BoK will deliver at least two more rate hikes - the question is whether they’ll start in August.

5. The appointment of Indonesia’s new central bank Governor after the sudden resignation of her predecessor appears to have calmed markets and eased pressure on the rupiah, Krystal says. However, there are two big tests coming up for Bank Indonesia.

Cheers,

Alex.

PS: Catch you tomorrow with the latest New Zealand inflation expectations.

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The RBA holds but is ready to act if inflation doesn’t come down. Australian consumer and business confidence hold steady. And Singapore’s economy grew faster than first thought last quarter.

In our deep-dive interview, ANZ Head of Australian Economics Adam Boyton analyses the RBA’s latest forecasts for clues on rates.

5 things to know in 5 minutes:

1. The Reserve Bank of Australia held rates yesterday, as expected, at 4.35%. ANZ Head of Australian Economics Adam Boyton has three key takeaways from the decision.

2. Ahead of the rate call, ANZ-Roy Morgan Australian Consumer Confidence was relatively steady last week, up just 0.3 points to 75. ANZ Economist Maddy Dunk says there were mixed results, though, under the hood.

3. Business confidence remained negative in July, falling one point to -6, according to NAB’s survey. Conditions rose 1 point to +4 as profitability and employment lifted. Maddy says while confidence fell when the Middle East conflict escalated, it has been recovering.

4. New Zealand light traffic activity - a good indicator of demand in the economy - rose 1.3% in July to sit where it was a year ago. Meanwhile heavy traffic activity - a measure of production - eased 0.2%. But it was still up 1.6% on the year, says ANZ New Zealand Chief Economist Sharon Zollner.

5. Singapore’s economy grew by more than first thought in the second quarter, at 5.9% year-on-year in the final print, from an advance read of 5.7%. ANZ Head of Asia Research Khoon Goh says growth was largely driven by the external-facing side of the economy.

Cheers,

Alex.

PS: Catch you tomorrow with what the latest US inflation data could mean for the Fed.

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Oil prices are up 5% as worries grow about when the Strait of Hormuz will reopen. The RBA is set to hold rates today. And Bank of Japan members grow more hawkish as inflation expectations grow.

In our deep-dive interview, ANZ Group Chief Economist Richard Yetsenga says there are some key similarities between 1990s Japan and China’s economy today.

5 things to know in 5 minutes:

1. Oil prices are up over 5% due to uncertainty of when the Strait of Hormuz will reopen. That saw US stocks fall slightly and Treasury yields rise. The moves come as traders position for tomorrow’s US CPI inflation data. ANZ Economist Bansi Madhavani says the market is focussed on whether higher oil prices are feeding into other parts of the economy.

2. The Reserve Bank of Australia has a rate decision today. ANZ Group Chief Economist Richard Yetenga is expecting a hold at 4.35%, along with the market.

3. Richard says markets will still be on the lookout for any indication there could be one more rate hike.

4. The Bank of Japan released its July meeting summary of opinions. ANZ Head of FX Research Mahjabeen Zaman said board members are more hawkish, seeing upside risk to prices. ANZ Research expects the BoJ to hike in October.

5. Mahjabeen says part of the upward pressure on prices had been coming from the weaker yen. The yen had weakened to dollar-yen of 164 before joint intervention with the US a little over a week ago saw it trading last week in a range of 157-158. However, it weakened again overnight past 159.

Cheers,

Alex.

PS: Catch you tomorrow with reaction to the RBA decision later today.

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US stocks are buoyed by a weak labour market because that means the Fed is less likely to hike rates. There’s new uncertainty over the opening of the Strait of Hormuz. China’s inflation cools.

In our deep-dive interview, ANZ New Zealand Chief Economist Sharon Zollner says ANZ’s latest card spending data for July shows Kiwis are getting out and spending more.

5 things to know in 5 minutes:

1. US stocks closed at record highs on Friday as traders lowered bets that the Fed would raise interest rates this year. That’s because the US job market was weaker in July and in previous months than forecast. Non-farm payrolls fell 23,000 in the month against the 80,000 rise expected. While the unemployment rate fell slightly to 4.1%, ANZ Economist Henry Russell says that was due to a shrinking labour force.

2. Henry says revisions to the previous two months subtracted 103,000 jobs from previous estimates.

3. Attention now turns to US CPI inflation data this week. ANZ Group Chief Economist Richard Yetsenga says ANZ Research is expecting headline CPI rose 0.1% and core inflation rose 0.2%, with data indicating peak pricing pressures have passed.

4. China’s consumer and producer price inflation growth both eased in July due to lower oil prices, says ANZ Economist Vicky Xiao Zhou. The CPI was up 0.5% from a year ago, down on the 1% seen in June. The PPI was up 3.5%, down on June’s 4.1%.

5. China’s trade remained resilient in July as both exports and imports recorded double digit percentage growth from a year ago. Vicky says the recent tech sell-off hasn’t shaken demand for AI-related hardware.

Cheers,

Alex.

PS: Catch you tomorrow with a preview of the RBA’s rate decision. Also, Bernard is on leave now until early September.

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