Weekly Updates

In Australia, NAB business conditions and confidence both deteriorated in August, while Westpac consumer confidence weakened in September. Abroad, the annual rate of US CPI inflation fell to the lowest level since February 2021. The Chinese trade balance widened, as export growth accelerated, while import growth slowed. The ECB delivered another interest rate cut, as expected.

In Australia, real GDP rose by 0.2% in Q2 and saw another fall in per capita terms. The current account deficit widened in Q2, but the trade surplus picked up in July. Dwelling approvals and new home loans rose in July, which was followed by another increase in home prices in August. The Melbourne Institute inflation gauge pointed to slower price growth in August.

In Australia, the monthly CPI indicator suggested that consumer price inflation declined to 3.5% in July, mainly thanks to the impact of government energy bill reliefs. Retail trade growth was flat in July, while private sector credit continued to climb at a steady pace. Private sector capex declined in Q2, while building work done was virtually unchanged.

In Australia, RBA minutes suggested that the cash rate might stay at the current level for longer than priced in by the markets. The Judo Bank PMI rose back into expansion in August. Abroad, FOMC minutes informed that a fed funds rate cut was discussed at the July meeting, and that virtually all members supported the start of policy easing in September.

In Australia, the annual rate of wages growth was unchanged in Q2. Employment growth almost tripled expectations in July, but the unemployment rate saw an unexpected uptick to 4.2% amid record labour force participation. NAB business conditions improved in July, but business confidence deteriorated.

In Australia, the RBA left its cash rate target unchanged at 4.35% as expected, but a rate hike was discussed at the meeting and that market pricing for rate cuts over the next six months does not align with RBA Board expectations. Abroad, the US ISM services PMI rose back into expansion in July. The Chinese Caixin services PMI suggested faster growth in July, while exports and imports picked up.