New Zealand rate remains at 5.5%, Asia markets mixed
Rate of US economy set for 3%+ growth in Q1 2024. Global markets dip, NZ adopts dovish stance, Asian markets mixed, Crypto still going up
United States Economic Growth Rate
The U.S. economy is poised for another robust quarter of growth, with Q1 2024 expected to mark the third consecutive period of over 3% expansion. Despite mixed data earlier in the year, including a slight retreat in consumer confidence, the Atlanta Federal Reserve’s real-time GDP tracker forecasts growth at 3.1%. Fourth-quarter revisions confirm an annualized growth rate of 3.3% late last year, with inflation held at 2%. The Federal Reserve, while pleased with the disinflationary trend from the previous year, remains cautious about adjusting interests, citing sustained expansionary pressures, particularly in the service sector. Governor Michelle Bowman reiterated a patient stance on interest cuts, aligning with the Fed’s outlook of steady policy rates.
U.S. Political Landscape and Economic Sentiment
Despite the buoyancy in economic indicators, President Joe Biden’s approval ratings face challenges, with a significant portion of Americans expressing dissatisfaction. The latest Reuters/IPSOS poll indicates a 58% disapproval rating, with sentiments split on economic stewardship between Biden and potential challenger Donald Trump.
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The Global Market and Interest Rate
World markets experienced slight declines, mirroring a dip in Wall Street futures. Amidst ongoing interest deliberations, Treasury yields moderated after a week of significant debt sales. Despite signals from OPEC regarding extended supply curbs, subdued oil prices contributed to a positive bond market sentiment. Expectations of synchronized cuts among major central banks, including the Fed, ECB, and Bank of England, have influenced market dynamics, with interest adjustments anticipated from July onwards.
New Zealand Economic Policy and Currency Rate
In a surprising move, New Zealand’s central bank adopted a dovish stance, maintaining the cash rate at 5.5% and revising down forecasts. Despite an anticipated decline in core inflation and balanced inflation risks, headline inflation remains above target, constraining policy flexibility. The New Zealand dollar depreciated following the announcement, reflecting market reactions to monetary policy adjustments.
Corporate Updates and Market Performance
Technology giant Apple shifted focus from electric car ventures to artificial intelligence projects, impacting stock performance positively. Conversely, Chinese markets experienced a downturn, with property developer Country Garden facing financial challenges, undermining confidence in the property sector. Key market indicators and corporate earnings reports from Paramount Global, Salesforce, HP, and others influenced trading sentiment.
Regional Market Performances
Asian markets witnessed mixed trends, with Japan’s Nikkei 225 edging lower, while South Korea’s Kospi gained. Hong Kong and Shanghai markets declined following financial announcements aimed at boosting tourism and property sectors. Australia’s S&P/ASX 200 remained stable amidst inflation percentage reports. In the U.S., Macy’s reported favorable results, contributing to market optimism, while cryptocurrency prices continued to surge, supported by new exchange-traded funds and positive earnings reports.
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