Global growth slowing, monetary policy backdrop set to shift - ANZ

According to analysts at ANZ, the key theme for markets in the year ahead are likely to be the slowing global growth, while the monetary policy backdrop looks set to shift, with the Fed expected to pause its rate hikes.

Key Quotes

“It looks likely to be a year that will challenge risk sentiment, with growth slower, liquidity tighter and geopolitical uncertainty weighing. The environment looks set to provide a test for the NZD, while global funding markets are likely to remain tight, with the risk of wider spreads that could put upward pressure on New Zealand retail interest rates independent of the RBNZ’s OCR decisions. Policy stimulus in China will be an ongoing theme, with the economy under some pressure.”

“In Australia, the extent of house price falls and behaviour of households will be watched closely. And domestically, the trend in GDP and core inflation will set the tone. GDP data for Q3 out this week is expected to show some payback from Q2 with stable underlying momentum (0.5% q/q, 2.7% y/y). There’s also a sprinkling of other data out this week. With that capping off the year, we would like to wish our readers a safe and enjoyable festive season.”