Australian Markets Weekly – Low inflation but interest rates fine at current levels

The markets make significant reversals on little fundamental developments, suggesting positioning and sentiment had become extreme.

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Key points:

  • Markets make significant reversals on little fundamental developments, suggesting positioning and sentiment had become extreme
  • NAB continues to see no cut by the RBA in spite of an expected very low Q4 CPI on Wednesday as evidence continues of the Australian economy transitioning to stronger non-mining growth
  • NAB business survey a fraction weaker in December, though market volatility may have affected responses. Tasmania and NSW remain the strongest economies in terms of business conditions, with WA still weak. Services outperforming, with non-mining parts of the economy generally improving, but mining arguably in recession.

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