ECONOMY

INSIGHTS, TRENDS AND CASE STUDIES

Conditions ease further, while confidence increases.

Current market sentiment among property professionals still negative but lifted in Q2 post the Federal election. Future expectations also improved sharply, reflecting a stronger outlook for prices and rents.

Recent RBA research shows that high mortgage debt is a drag on consumer spending, helping explain the weak growth in consumption since the global financial crisis.

The NAB Rural Commodities Index rose 0.5% in June.

Growth slowed in Q2 but policy support should see it stabilise.

Indicators in major advanced economies point to a renewed easing in growth for the rest of 2019, driven largely by the US economy. Similarly in Australia, we expect growth to continue at a below trend pace over the next few years.

NAB’s Non-Rural Commodity Price Index has been on the up in recent quarters, in large part due to iron ore prices.

Forecasts unchanged – including key drivers of growth. Rate cuts to help but mainly in 2020. Fiscal stimulus impact small.

Confidence kick short-lived, conditions remain below average.

Our NAB Online retail sales index data indicates a return to sales growth in May 2019, after considerable weakness in April.

Lower mortgage rates and improved sentiment could already having a flow-on effect for housing market conditions.

Fruit and vegetable prices are the two most volatile components of the CPI and can have a large effect on headline inflation.

June was another month of two halves for the AUD/USD.

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