Market Updates

Wall Street rebounded last night, while US Treasuries fell further and the US dollar depreciated, as the markets continued to digest the Fed’s forward guidance. Expectations for the first fed funds rate cut have moved back to November, with another cut almost fully priced in for early 2025. Investors now await the April non-farm payrolls report scheduled for tonight.

In Australia, the CPI inflation figures surprised to the upside, though pointed to further disinflation in the annual terms. The Judo Bank flash PMIs suggested the fastest pace of expansion in two years. Abroad, US GDP growth slowed in Q1, while PCE price inflation picked up. The S&P Global flash PMIs suggested even slower growth in the US in April and faster expansion in Europe and Japan.

The Australian dollar slipped against the stronger US dollar in April, its third monthly loss in the past four. The exchange rate started the month positively as softish US economic data and dovish comments from Fed Chair Jerome Powell drove the greenback lower, while the Aussie rose against all the major currencies. The AUD/USD closed 9 April at its highest level since January.