This via Westpac on Key Market Drivers for Australian and New Zealand rates
The client note is focused on interest rates markets. WPAC divide the key drivers into 3 sections ... (briefly summarised) ... :
1. Macro
- 1. US policy will be back in focus with an important CPI read and a number of Fed speakers scheduled to discuss their views.
- 2. Equity markets have been soft. Will they deteriorate further? That would be bond supportive but may increase fears of a revision to term risk premia.
- 3. Updates to the US tax plan discussions will be a primary determinant of global risk appetite.
And then highlight local factors for Australia and New Zealand
Australia
- 1. Data: Consumer Sentiment and the October Labour Report will provide crucial insights but the Q3 Wage Cost Index is more important to the medium term outlook.
- 2. Politics: The ongoing citizenship saga in Federal Parliament has claimed more scalps today, however there has also been an agreement between the two main parties to have all Parliamentarians reveal their credentials by early December. Wednesday will also see the Same-Sex Marriage postal ballot results revealed.
New Zealand
- 1. RBNZ has reiterated its on-hold stance but flagged extra fiscal stimulus which may impact GDP early 2018.
- 2. New NZ government policies are yet to be revealed in detail but could be influential on OCR outlook.
- 3. NZ markets are following US reflation themes very closely
