Weekly Updates

In Australia, the RBA cut its cash rate target by 25bps to 4.10% as expected, but its message was hawkish with no guidance about future decisions. Employment saw another solid gain in January, but the unemployment rate ticked up to 4.1%. Wages growth slowed further in Q4 2024. The Judo Bank flash PMIs pointed to further modest expansion in the private sector.

In Australia, NAB business survey suggested business conditions deteriorated in January, but confidence improved. The Westpac consumer sentiment index was almost unchanged in February. Growth in the value of new home loans slowed in Q4, dragged down by a decline in investor loans.

In Australia, retail trade declined less than expected in December, while Q4 retail sales volumes growth surprised to the upside. The broader household spending indicator, which is to replace retail trade in mid-2025, rose more than expected in January.

In Australia, trimmed mean inflation eased close to the RBA’s target range in Q4, increasing the probability of a cash rate cut in mid-February. NAB business conditions and confidence improved and business credit growth remained strong in December.

This week’s highlights: Abroad, in the first days of his second term, US President Donald Trump announced a review of US trade relationships due 1 April, which will be a base for future tariffs and new agreements. He also signed executive orders targeting illegal migration, energy and climate policies, as well as a withdrawal from the global corporate tax deal among other measures.

The Westpac-Melbourne Institute consumer sentiment index slipped a little in January. The Melbourne Institute inflation gauge added weight to expectations that Aussie underlying inflation eased in Q4. A rise in exports drove the Chinese trade surplus wider in December and iron ore import volumes hit a record high in 2024. Chinese GDP growth met the 5% Government growth target for 2024.