EM Asian currencies likely to rally further during rest of September, remain susceptible to Fed’s monetary policy stance: Scotiabank
China’s domestic activity continues to deteriorate in August, credit demand lacklustre amid uncertainty
Risk-on sentiment likely to continue during rest of September on hopes of US-China talks achieving a breakthrough, says Scotiabank
Australian bonds slump as positive U.S. data aid markets, easing trade tensions provide modest support
USD/INR likely to showcase supportive tone in near-term given prospects of further RBI cuts this year, says Commerzbank
Australia’s demand for mortgages picks up sharply in response to rate cuts in June and July, RBA unlikely to be impressed
Government bonds likely to benefit less from ‘safe haven’ inflows going forward due to worries over valuation and volatility, says DNB Markets
Australia’s business conditions deteriorate further below long-run average in July, no sign of broader economy in near-term
Australia’s business conditions deteriorated further below their long-run average in July. Although confidence improved slightly, it also remains below average. The jump in capacity utilisation and the employment index in June were reversed in July; these indicators are again consistent with the profitability index in pointing to slower employment growth and a higher unemployment rate (to be released Thursday), according to the latest report from ANZ Research.
Business conditions weakened slightly to 2.4 in July from 3.6 in June. After reaching a seven-month high in June, capacity utilisation fell back down to 80.9 percent, and the employment index fell below zero for the second time in four months.
Although there was some improvement in profitability and forward orders, they remain very weak, while trading and exports were also down. Labour cost growth moderated, but growth in purchase costs accelerated.
Business conditions deteriorated in all states aside from Western Australia, where conditions rose by 11.6 points to an 11-month high. Tasmania saw the largest monthly fall (-24.0 points) to its lowest level in six years.
Smaller declines were recorded in Victoria (-2.6 points), New South Wales (-1.7), Queensland (-1.5) and South Australia (-1.1). Average conditions in all states over the past three months are now below their long-run average.
Business conditions in construction collapsed in July, down 19.0 points from the eight-month high in June. Despite the prospect of tax cuts boosting household spending in H2 2019, retail conditions fell 10.6 points to a historical low of -31.9.
Falls in wholesale (-7.8), recreation (-1.5) and manufacturing (-0.6) also contributed to the deterioration in overall conditions. This was partially offset by improvements in mining (+12.3 points), transport (+11.6) and finance (+8.3).
"Labour cost growth also moderated and we could see softer wage growth in Q2 (to be released Wednesday). No sign of a pick-up in the labour market or broader economy in the near-term," the report further commented.