Thursday: US Treasury targets long bond yields

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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