Daily Commentary BY THE CURVE TEAM –

Data Soft Ahead of Trade Deal Signing

15th of January, 2020

Australian consumers remain down beat while offshore the US-China trade deal is set to be signed.

The weekly consumer sentiment survey released yesterday showed that consumers remains downbeat. However, there were some big swings in the sub components with improved expectations around the economy being offset by increased concerns around family finances. We will get one further update on the weekly index before the more comprehensive monthly survey will be released.

Data out overnight in the US showed that despite record low unemployment, falling underemployment and wage growth around 3%, inflation in the US remains weak. Both the headline and core CPI missed estimates in December by 0.1%, rising by 0.2% and 0.1% respectively. The annual rate of both measures remains stable just above 2% which is tracking a little above the Fed’s preferred PCE measure.

The big focus over the next 24 hours will be the highly anticipated signing of phase 1 of the US-China trade deal. Some details of the deal have started to flow. However, markets will be keen to see the full details along with some guidance to where things will go from here.

David Flanagan

Director - Interest Rate Markets