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On April 3, Kimberly Clausing, a former Biden administration official and nonresident senior fellow at the Peterson Institute for International Economics, called Trumps tariff announcement on Wednesday "very stubborn and much worse than I expected." "I expected things to be bad, but I didnt expect this level of self-harm. Its shocking that anyone thought this was a good idea. Id be shocked if we can get through this without a recession and Trump doesnt have to reverse his policies."On April 3, some economists worry that if Trump does not quickly cancel the latest round of tariffs, it may push the US economy into a recession. "If the US government implements these higher tariffs without major exemptions, it will be difficult for the economy to digest this. A recession seems more likely." said Mark Zandi, chief economist at Moodys Analytics. Zandi said, "In many ways, the tariffs announced by Trump are even worse than the worst case scenario he envisioned. If they stick to it, I will buckle up and prepare for the impact." Zandi added that on a static basis, tariffs account for nearly 2% of GDP (not considering the impact of tariffs on the economy and taxes), which makes this round of tariffs the largest tax increase since the tax increase used to finance the war during World War II.German Automobile Industry Association VDA: The EU must now speed up and make up its mind on the issue of free trade agreement.On April 3, the Reserve Bank of Australias latest report for the banking industry warned that continued uncertainty in US trade policy "could have a chilling effect on business investment and household spending decisions, and pose a significant headwind to the outlook for global economic activity and inflation." The Reserve Bank of Australia said there was also considerable uncertainty about the impact of possible changes in fiscal, regulatory and other government policies on global growth and inflation.The Hang Seng Index in Hong Kong opened on April 3 (Thursday) down 564.32 points, or 2.43%, to 22,638.21 points; the Hang Seng Technology Index opened on April 3 (Thursday) down 168.53 points, or 3.11%, to 5,257.91 points; the CSI 300 Index opened on April 3 (Thursday) down 219.05 points, or 2.57%, to 8,312.46 points; the H-share Index opened on April 3 (Thursday) down 61.24 points, or 1.59%, to 3,800.76 points.

AUDNZD recovers over 1.0900 as bets on RBA hawkishness surge

Alina Haynes

Nov 08, 2022 16:27

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After dipping below 1.0884 in the early Asian session, the AUDNZD pair has received renewed interest. The asset has reclaimed the round-level barrier of 1.0900 as wagers on the Reserve Bank of Australia's (RBA) continued rate hike soared. In the absence of a substantial stimulus that could move the cross in a certain direction, the cross is predominantly trading in a sideways fashion.

 

In the meantime, Goldman Sachs analysts have offered a pessimistic prognosis for future RBA interest rate decisions. We were stunned by the RBA's October decision to suspend the pace of rate hikes, especially before the policy rate had reached the lower bound of their estimate for the nominal 'neutral rate,' which is between 3.00 and 4.50%.

 

Concerning forward guidance, the investment banking industry asserts that RBA's more frequent board meetings provide RBA Governor Philip Lowe with a possible opportunity to synchronize with the worldwide policy tightening pace.

 

Last week, the RBA's monetary policy statement issued gloomy forecasts for Gross Domestic Product (GDP). In addition, short-term inflation expectations remained elevated, hovering around 8%, as inflationary pressures in the Australian region showed no signs of abating.

 

On the front of New Zealand, investors anticipate the release of Business NZ PMI data on Thursday. The expected economic data is 52.7, up from 52.0 in the previous release. Nonetheless, inflation forecasts for the following two years will be constantly reviewed beforehand. In CY2023, it is anticipated that rising service and commodity prices will continue to exert considerable price pressures worldwide. A rise in inflation projections over the long run could exacerbate market volatility.