Weekly Updates

In Australia, NAB business conditions remained below average in June, while business confidence improved, but remained negative. Westpac consumer sentiment pointed to somewhat smaller, yet persisting pessimism in July. Consumer inflation expectations dropped, though this preceded the recent pick-up in oil prices.

In Australia, the Melbourne Institute inflation gauge suggested that consumer price inflation declined further in June. RBA Assistant Governor Sarah Hunter has reminded that the central bank’s response to supply shock depends on its duration and impact on inflation expectations.

In Australia, the RBA minutes maintained the hawkish tone from the June post-meeting statement. The national Cotality home value index declined in June, driven by lower prices in Sydney and Melbourne. Dwelling approvals saw another fall in May, while the annual rate of private sector credit growth reached the highest level since late 2022. The goods trade balance turned back negative in May.

In Australia, annual headline CPI inflation in May surprised to the downside, but trimmed mean inflation rose more than expected. Employment bounced back in May, after a significant drop in the previous month, while the unemployment rate ebbed to 4.4%. Household spending growth in May also turned out stronger than anticipated.

In Australia, the RBA kept the cash rate unchanged on Tuesday, but reinforced its tightening bias. Abroad, the US and Iran have signed to a 60-day ceasefire memorandum of understanding. The FOMC and Bank of England left their policy rates steady this week.

At home, NAB business conditions held steady at a subdued level in May, while business confidence improved but remained extremely weak. Westpac consumer sentiment fell back in June, to be at one of the lowest levels in the 50-year history of the survey.