Archive

Indonesia CPI Inflation 3.0% y-o-y (consensus 3.1%) in Apr-24

- Indonesia's CPI inflation rate in April 2024 rounded down to 3.0% y-o-y, marginally below market expectations of 3.06%.
- The slight downside news was in non-core components as the core rate crept up by 5bps to 1.77% (consensus 1.76%).

New Zealand Unemployment Rate 4.3% (consensus 4.2%) in Q1-24

- New Zealand's unemployment rate increased surprisingly far in Q1-24 to 4.3%, surpassing the one-year average by 0.35 percentage points and the long-run average by 0.70 percentage points.
- Employment contracted by 0.2% quarter-on-quarter, but labour costs rose by 0.8% q-o-q and 3.8% y-o-y.

US Policy Rate 5.5% (consensus 5.5%) in May-24

• The FOMC unsurprisingly held the federal funds rate steady at 5.25-5.5%, reflecting ongoing economic strength paired with higher-than-expected inflation, complicating efforts to reach the 2% inflation target.
• The Committee also decided to slow the pace of its securities holdings reduction, a strategic move aimed at mitigating market stress and aligning with broader economic stability.
• The FOMC emphasizes its commitment to a data-driven approach, indicating that future interest rate decisions will closely depend on inflation trends and economic data. It maintains readiness to adjust policy as needed to balance growth and price stability.

HEM: Molting Hawk Feathers

• Rolling rate cuts have flattened the front end enough
• Hikes are unlikely despite limited cuts coming later
• Market pricing may overshoot before we become dovish
• Our Nov-24 BoE call is still slightly later than priced
• A Fed delay beyond Sep would slow ECB cuts after June