Daily Digest Market Movers: Australian Dollar appreciates on weaker US Dollar
- Australian Wage Price Index (QoQ) grew by 0.9% in the fourth quarter as expected, lower than the previous rise of 1.3%. The index rose by 4.2% year-over-year, surpassing the market expectation to be unchanged at 4.1%.
- Westpac Leading Index (MoM) declined by 0.1% in January against the previous reading of flat 0.0%.
- The ANZ-Roy Morgan Consumer Confidence improved to 82.8 this week from 82.6 prior. Remarkably, the index has now spent a record 55 consecutive weeks below the mark of 85.
- RBA’s meeting minutes revealed that the Board deliberated on the possibility of raising rates by 25 basis points (bps) or keeping rates unchanged. While recent data indicated that inflation would return to target within a reasonable timeframe, it was acknowledged that this process would "take some time." Consequently, the board agreed that it was prudent not to rule out another rate hike.
- The People’s Bank of China (PBoC) implemented an unprecedented reduction in the five-year Loan Prime Rate (LPR) by 25 basis points, marking the largest decrease on record, from 4.20% to 3.95%. This move was aimed at bolstering the housing market. However, analysts suggest that the overall impact on stimulating the economy may be marginal.
- The Federal Reserve's dot plot for this year indicates an expectation of 75 basis points in rate cuts, whereas the Fed funds futures market is pricing in approximately 89 basis points in cuts.
- ANZ anticipates that the Federal Reserve (Fed) will commence rate cuts from July 2024.
- 3-Month and 6-Month US Bills auctioned at 5.23% and 5.1%, respectively.
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