Growth subdued but will improve in late 2024
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Growth subdued but will improve in late 2024
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China confirms an unchanged growth target for 2024 but headwinds will make it much harder to reach
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4 in 10 SMEs think AI will make their business more profitable.
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Download the latest NAB Regional and Agribusiness Horizons Report for data-led insights on the state of play in regional and rural Australia.
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Our monthly transaction data suggest spending was more subdued in February
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Hear NAB’s senior expert panellists discuss a range of topics to provide key insights to help you and your business prepare for the current property market climate.
Conditions rise but confidence, orders remain low
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Growth slows in line with NAB’s forecast
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A slow end to 2023
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Interest rates are on hold but what are the other key indicators for the year ahead? We break it down.
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Growth rebounded in January from a significant drop in December
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NAB’s Chief Economist, Alan Oster provides his thoughts on the Australian and Global economy.
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Rate cuts expected in 2024 but inflation path remains uncertain
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RBA on hold with inflation & labour market easing
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An exclusive Commercial Real Estate webinar on the on the Retail sector, including the latest market and property insights. Watch now.
Webinar
Conditions dip below average, price growth ticks up
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SME confidence negative as conditions soften
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In Q4 the NAB Residential Property Index continued its recent upward trajectory
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Effects of monetary policy increasingly evident
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We observed a contraction in online sales growth in December, following strong October and November results.
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This month NAB’s Chief Economist, Alan Oster provides his thoughts on the Australian and Global economy.
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Our Forward View this month covers both the Australian and Global economies.
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Our monthly transaction data showed a fall in spending in December.
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Business conditions cool as retail price growth slows
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China beat its modest growth target in 2023, but this will be harder to achieve in 2024
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There was a wide divergence in growth among major advanced economies in Q3 – with strength in the US in contrast to relative weakness in other countries. For Australia, recent data have confirmed that the economy is growing at a well-below trend pace, inflation pressure is continuing to moderate and the labour market has remained healthy.
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Weaker inflation boosts rate cut hopes
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Slow growth to persist in Q4 and into 2024
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China likely to hit its growth target this year, but next year looks more challenging
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Our monthly transaction data showed a pickup in spending in November, particularly in retail.
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Confidence slides but conditions still above average
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Below trend growth to continue
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Online retail sales grew strongly in October, following on from a rebound in September.
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Global inflation slowed in September, including a softening in advanced economy inflation to its lowest level since September 2021. For Australia, we have revised up our forecasts for growth and inflation (in the near-term) while lowering our expected peak in the unemployment rate.
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Global growth resilient in Q3 but set to slow going into 2024
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Growth outlook upgraded but 4.6% rate peak ahead
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Bond-fuelled lending to support near-term growth but challenges remain unaddressed
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Our monthly transaction data showed a fall in spending in October across a number of categories including retail as well as a range of services sectors.
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Confidence remains low despite healthy conditions
Growth holding up but subdued year ahead
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There was a broad-based rebound in online retail sales in September
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SME conditions improve but smallest firms still negative
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The NAB Residential Property Index maintained its upward momentum in Q3.
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Labour costs rise as price inflation remains elevated
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Global inflation again picked up in August. A key contributor to recent inflation trends has been energy prices, with oil prices increasing since June. For Australia, our forecasts are unchanged. Recent data all point to continued resilience but the ongoing pass through of higher rates and high inflation still suggest consumption growth will soften in H2 2023.
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China’s third quarter growth beat expectations; 2023 forecast edges back above target
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Inflation yet to be defeated – policy rates could stay high for longer
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Growth to remain subdued, but avoid a major downturn
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Our monthly transaction data continues to suggest spending has been resilient, with growth in September following on from fairly strong nominal growth in prior months.
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Cost pressures ease amid resilience in activity
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Global inflation was higher in July, although this uptick was not broad based – concentrated in a few key emerging markets. For Australia, our forecasts for GDP growth have strengthened marginally, reflecting a slightly stronger than expected result for Q2.
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Central banks may be at their peaks, but energy prices pose a risk to disinflation trend
Growth to remain subdued despite signs of resilience
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Employment index rises as resilience continues
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Powell affirmed the Fed will ‘keep at it’ on inflation, but what else happened at Jackson Hole? In the weekly, we pull out some of the key insights, including on the outlook for government debt and the ‘friendshoring’ dynamic.
Hopes have been raised of a soft landing for the global economy, although a number of headwinds remain. For Australia, our forecasts for GDP growth have strengthened marginally but we continue to expect growth to be well below trend in 2023 and 2024 as the impact of rate rises flows through.
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The impact on SMEs
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How big is the issue for SMEs?
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Soft landing hopes rise but headwinds remain
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Soft start to Q3 signals a growing chance that China could miss its annual growth target
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Flat consumption in Q2 with one more rate rise left
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Our monthly transaction data showed a surprisingly positive result for July, with spending still holding up.
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Conditions still above average despite warning signs.
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Very slow growth likely across the states in 2023-24
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SMEs see conditions weaken in Q2 as economy slows
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NAB Online Retail Sales Index growth contracted in June.
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The NAB Residential Property Index bounced sharply in Q2.
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Our forecasts for the global economy are largely unchanged this month we expect growth of around 2.8% in 2023 before slowing to 2.7% in 2024. For Australia, we continue to expect quarterly GDP growth to be flat over the next three quarters, with growth of just 0.5% over 2023 and 0.9% in 2024 as the impact of rate rises flows through.
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Supply issues easing but labour still hard to find
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China’s weak Q2 growth presages weaker global growth
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A slow second half, but persistent inflation
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China’s recovery lost momentum in Q2 and the outlook for the second half remains cloudy
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Any significant change to global supply chains will take time
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Our monthly transaction data showed a broadly flat result for June, with a lift in hospitality spending but a fall in retail.
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Conditions still above average despite warning signs
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Our NAB Online Retail Sales Index grew rapidly this month, following on from very subdued growth over the past two months.
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After relatively robust growth in Q1, global activity looks set to slow in the near term. For Australia, we are seeing increasing signs that activity is slowing sharply after a very strong period of growth in 2022.
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Global growth set to slow as monetary policy bites
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4.6% rate peak as recessionary forces gather
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Fed pauses in June, but another hike is likely
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Weakness in domestic demand led to underperformance in May
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Is China finding new markets for its exports?
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Our monthly transaction data showed a small rise in spending in May (in seasonally adjusted terms), driven by discretionary spending.
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Worrying signs of a slowing in activity
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A slow start for growth in 2023
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Activity – and inflation – resilience continues
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Watch the webinar now.
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NAB Online Retail Sales Index was flat in month-on-month in April, after a mild contraction in March.
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Reports of a property rebound appear premature
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How big is the issue for SMEs?
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The impact on SMEs
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NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
Global economic data point to a bounce in growth in Q1, with China providing around 40% of this total. For Australia, we continue to expect growth to be well below trend at 0.7% and 1.2% in 2023 and 2024 respectively – though we have reverted to our previous expected rate call of a peak of around 4.1% and see a material risk that rates reach 4.35%.
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Global growth set to slow from robust Q1 results
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Base effects inflate growth in April; still waiting on demand to recover
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Rates to pass 4% with economy to slow in response
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Federal Budget 2023 delivered a $4.2bn surplus, and focused heavily on relief – targeting energy bills and the cost of healthcare in a big way.
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Our monthly transaction data showed another small fall in spending in April (in seasonally adjusted terms), largely driven by discretionary services categories.
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Conditions slowly normalising but still high for now.
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NAB Online Retail Sales Index month-on-month growth contracted in March, following the strong February result.
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Q1 GDP slowdown driven by inventories
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How prevalent are attacks & scams & how are businesses & consumers responding?
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Little improvement in cost pressures for SMEs in Q1
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Constraints still tight but prices past their peak
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We continue to anticipate a sharp slowdown in global growth in 2023, while for Australia, there are signs that consumption is plateauing ahead of a likely slowdown later in the year.
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Bounce in global growth in Q1 won’t last
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Services sector supports growth rebound in Q1, as base effects boost consumption
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Economy to slow despite jobs, population surge
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The NAB Residential Property Index recovered slightly, but is still well below the survey average and down sharply from the same time last year.
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Our monthly transaction data suggests spending turned a corner in March with total spending declining, after holding up through more than a year of high inflation and rising interest rates.
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Conditions hold up, price pressures ease
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Tentative recovery: Chinese outbound tourism continues to face constraints
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Population rebounding but growth slowdown looms
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The shape of Australian insolvency
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NAB Online Retail Sales Index month-on-month growth accelerated in February, after returning to growth in January.
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Just how resilient is the Australian economy in 2023? From consumer confidence to business spending, hear directly from NAB Chief Economist Alan Oster and Metro & Specialised Banking Exec Julie Rynski. Watch now.
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Our global forecasts are little changed this month. Also, our outlook for the Australian economy is broadly unchanged.
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Bounce in Q1 2023; but bank stress highlights weaker outlook
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Australia passing through a possible turning point
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Fed caught between strong data & bank panic
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Modest reopening rebound in early 2023 with consumers yet to re-emerge
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Our monthly transaction data indicates that spending was broadly flat in February.
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Confidence volatile but conditions still strong
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Step down: China’s cut its growth target to a multi-decade low
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NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
An exclusive CRE webinar discussing the economic and interest rate environment.
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In month-on-month terms, growth returned to the NAB Online Retail Sales Index, following on from a weak December result.
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A solid outcome to round out 2022
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A range of global indicators point to a more positive start to 2023 than we had previously anticipated, leading to an upward revision to our forecasts. For Australia the economy has remained resilient but we see growth slowing sharply later in 2023 and into 2024.
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Inflation is slowing but is still yet to be tamed
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Rising rates to see slower growth ahead
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Our monthly transaction data indicates that spending picked back up in January after a small fall in December, with strength across most spending categories.
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New-year confidence boost as resilience continues
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January data surprise = higher fed funds rate
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COVID’s rapid spread may allow a faster economic rebound in 2023
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Conditions eased for SMEs in late 2022.
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How big is the issue for SMEs & what are they doing to overcome these challenges?
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The impact on SMEs & how business is responding.
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The NAB Residential Property Index fell for the third straight quarter as the downturn in national housing prices deepened
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Confidence down with constraints remaining tight
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NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
Growth in the NAB Online Retail Sales Index contracted in December after two months of growth in October and November.
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Our monthly transaction data indicates that spending softened in December after a solid rise in November.
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Economy beginning to slow; inflation peak passed
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Q4 GDP looks solid but weakness emerging
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Transition away from zero-COVID could boost growth in 2023, however needs to rebalance towards consumption
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NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
Global business surveys continue to point to a weakening global economy, likely reflecting monetary policy tightening, the energy supply shock as well as COVID-19 related disruptions in China. For Australia, the recent national accounts data showed that the economy remained resilient in Q3 and labour force data continue to reflect a healthy but tight labour market.
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Latest COVID-19 wave impacting activity in Q4; COVID policy pivot could provide boost in 2023 (after transition period).
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With inflation still high, policy rate hikes to slow growth in ‘23
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Our monthly spending data indicates that spending picked up in November after a softening in October, largely driven by strength in retail and hospitality which offset a fall in some discretionary categories such as arts, recreation & travel.
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Slow growth ahead after final rebound bump in Q3
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NAB senior leaders discuss the 2023 business outlook and where the opportunities will lie.
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Confidence now negative, despite strong conditions.
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Domestic demand solid early in Q4
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US chips controls could constrain China’s tech development goals
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Slowing growth as consumption, trade normalise
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Growth in the NAB Online Retail Sales Index is back in positive territory.
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China refines, not abandons, zero-COVID and remains without an exit strategy
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The impacts on business & supporting local manufacturing to address them
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We see a sharp slowdown in global economic growth next year. To date, the Australian economy has remained very resilient although there are some very early signs of a slowing.
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Further monetary tightening to significantly slow growth in 2023.
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Higher rates to slow growth to below 1% in 2023.
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Our monthly spending data showed a slowing in spending in October, particularly in discretionary areas such as household goods and recreation & travel, although growth held up in the hospitality sector.
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CoreLogic’s national home value index moved through its sixth month of decline last month, with values down a further 1.2%, taking the cumulative drop from the market peak to 6.0%.
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Conditions still strong but confidence weaker
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Q3 GDP – economy growing again (for now).
Could Xi Jinping extend his leadership beyond his third term?
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NAB Online Retail Sales Index returns to growth in September
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Easing conditions for small firms, despite strong demand
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Growth rebounded in Q3, but base effects flattered the results
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Conditions holding up as constraints tighten
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COVID disruptions continue to fade while growth remains strong and labour markets are tight everywhere
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Rapidly tightening monetary policy, an energy price shock in Europe and deteriorating domestic conditions in China are set to slow global economic growth to 2.3% in 2023. For Australia, we see growth slowing to well below 2% in each of the next two years, however we do not expect a major downturn.
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Central banks inflation priority leads to weak growth outlook
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Our new monthly consumer spending analysis shows spending has remained strong over recent months, supported by rebounding hospitality spending and discretionary spending on travel and other activities.
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Near term resilience but a slowing ahead
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National housing market sentiment fell to below survey average levels in Q3 2022 as the downturn in the national housing market gathered speed and spread wider. Solid growth in rental markets however continued to provide some support.
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Conditions roar as costs show signs of easing
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Recession risk – Q3 breather likely temporary
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Vicious cycle: falling land sales hitting local government revenues
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In month-on-month terms, our NAB Online Retail Sales Index has contracted for a seventh straight month.
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Buyers fight back: Mortgage strike points to property sector’s weak underpinnings
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Base effects flatter August’s growth rates, as a fresh COVID-19 wave threatens outlook
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We see global economic growth slowing in 2023. For Australia, we continue to see below trend growth over 2023 and 2024 as the impact of the lockdown rebound ends, global growth slows and higher rates and prices begin to weigh domestically.
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NAB's latest weekly consumer tracking data to 10 September shows unexpected strength over the last two weeks.
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Economic outlook weakens as central banks continue to tighten.
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Growth to slow as rates and inflation bite.
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Our data mapping points to a slight drop in retail sales in August.
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No signs of slow down yet as strong conditions roll on.
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Australian agricultural commodity prices have continued to unwind, posting a second month of lower prices as measured by NAB’s Rural Commodities Index. This comes against a backdrop of continued excellent seasonal conditions, but elevated input costs and rapidly rising interest rates to control global inflation.
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NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
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NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
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A solid outcome ahead of a slower H2 2022.
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NAB's latest weekly consumer tracking data shows the weakening trend of the past few months continues, albeit from a very high base.
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Labour market still very tight despite GDP fall
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NAB's Online Retail Sales Index continued to contract in July.
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NAB's latest weekly consumer tracking data shows the moderation in spending growth continues post-EOFY peak, albeit from elevated levels.
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Reopening rebound limited by weakness in domestic demand and credit appetite
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We now forecast the global economy to expand by 3.0% in 2022 before slowing to 2.5% in 2023. For Australia, we have pulled back our near-term growth forecasts, with high frequency data showing a slowing in consumption growth. Following growth of 2.2% during 2022, we continue to see below-trend growth of 1.6% through 2023 and 1.8% through 2024.
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Weaker growth prospects, persistent inflation & geopolitical risk
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Our data mapping points to moderate growth in retail sales in July.
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Rebound set to fade as consumption slows in H2 2022
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Confidence & conditions rally as economy strains capacity limits
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While consumption has outperformed in the pandemic era – notwithstanding significant differences between sectors – gravity now appears to be catching up.
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Walking away? China’s ambitious growth target has moved too far out of reach.
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GDP falls again in Q2
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Confidence falls despite strong post-Omicron conditions.
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In month-on-month terms, our NAB Online Retail Sales Index contracted again in June.
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An exclusive webinar on NAB Commercial Property - Impacts of Global Supply Challenges on the Industrial Property Market. Watch now.
Webinar
While the new financial year has seen lower spending, the trend shows a very moderate decline.
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Strong conditions as inflationary pressure builds.
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The impact on business, and how SMEs believe supply chain issues can best be solved.
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How big an issue are they for SMEs, what are their expectations & how does business think they can be resolved?
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COVID-19 measures hit China’s economy harder than expected in Q2, and present downside risk to the outlook.
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Globally, major central banks continue to tighten monetary policy in response to the highest inflation in decades, thereby straining household finances and leading to falls in asset prices. For Australia, we have not changed our view on the underlying trajectory for the economy but see greater risk for household consumption on the back of higher rates and inflation.
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Tightening monetary policy puts the brakes on growth prospects
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Interest rates & inflation to weigh on the consumer.
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Overall retail spending looks to be coming under increasing pressure.
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Business confidence falls further while conditions hold up.
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Global Central Banks have been lifting interest rates to combat 40-year high inflation numbers. What does this mean for commercial borrowers? Watch now.
Webinar
Consumers spending big on EOFY sales.
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Global Central Banks have been lifting interest rates to combat 40-year high inflation numbers. What does this mean for commercial borrowers?
Webinar
How will the US respond to China’s failure to meet its trade commitments?
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An exclusive webinar on Commercial Property. Watch now.
National housing market sentiment fell sharply in Q2 as house prices weakened, but still positive supported by strong rents.
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Our latest weekly consumer tracking data shows something of a mixed picture.
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Since last month’s wrap, we have seen further gains in most agricultural commodity prices, tentative signs of a stabilisation in fertiliser prices, combined with a lower AUD and a weakening global growth outlook.
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In month-on-month terms, our NAB Online Retail Sales Index contracted again in May.
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This article first appeared in the Australian Financial Review - Mark Eggleton
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The Fed tightens the screws.
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Global inflation remains high and showing no signs of easing, placing pressure on household finances. For Australia, we have lowered our GDP forecast for this year and next, upped our near-term inflation outlook and incorporated a new, front loaded rate track for the RBA.
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Our latest weekly consumer tracking data to 11 June shows ongoing signs of deterioration, albeit from elevated levels earlier this year.
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Global growth prospects continue to weaken.
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COVID-19 uncertainty continues to cloud China’s economic outlook.
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Our data show a drop in retail sales in May, albeit from generally strong levels seen earlier in the year.
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Higher inflation, higher rates & slower growth ahead.
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Confidence eases but conditions and outlook remain strong.
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Our latest weekly consumer tracking data to 28 May was broadly solid, although there are signs of softening from highs earlier this year.
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Low cost outlier: China’s consumer price growth has remained weaker than most international peers.
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NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
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Imports to weigh on growth despite strong consumption.
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In month-on-month terms, our NAB Online Retail Sales Index contracted for a third consecutive month in April.
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Revising down US growth forecasts.
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Download NAB’s Regional & Agribusiness Horizons Report for compelling new insights into regional and rural Australia.
Article
The Reserve Bank of Australia (RBA) has started raising rates for the first time since November 2010. What does this mean for commercial borrowers? Watch now.
Webinar
Our latest weekly consumer tracking data to 14 May was broadly quite encouraging.
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Since last month’s wrap, we have seen three key changes, namely more rain forecast, ongoing inflationary pressures making central banks more hawkish and a materially weaker global economic outlook.
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COVID lockdowns point to weaker growth and greater uncertainty in the near term.
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We now expect the global economy to grow by around 3.4% in 2022 and 2023. For Australia, we continue to be optimistic on the economy expecting above-trend growth this year and ongoing strength in the labour market.
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Growth set to slow to below its long-run average
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Rates to rise further as strong growth continues
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We see retail sales continuing to grow in April, albeit at a somewhat slower pace than previous months.
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Conditions rise further on Recreation & Personal Services recovery.
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In month-on-month terms, our NAB Online Retail Sales Index contracted for a second consecutive month in March.
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Even with GDP falling in Q1, the Fed is set to move faster.
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The COVID-19 pandemic could accelerate China’s long term demographic pressures
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Follow the money: The strength of China’s outward foreign investment during pandemic raises questions.
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Housing market sentiment buoyed by growing rents as prices slow, but confidence slips as expectations for price growth scaled back.
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Omicron weighed on SME conditions and confidence in Q1.
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COVID outbreaks dampened growth in March, and cloud near-term outlook.
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The global economic outlook remains clouded by numerous factors, however, we expect that the global economy will grow by 3.7% in 2022 and then slow to a trend- like 3.5% in 2023. For Australia, GDP is expected to grow by a strong 3.4% this year – supported by healthy growth in consumption and ongoing gains in business investment.
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COVID and conflict continue to cloud near term outlook.
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March has seen smoother retail prospects when compared to the very choppy conditions across January and February, with our forecast pointing to moderate growth in the month.
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Rate rises set for June as strong growth continues.
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Conditions surge higher as costs, prices hit records.
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NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
Data softer than previous week, although up from early March.
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Confidence and conditions pull back but remain resilient.
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In month-on-month terms, our NAB Online Retail Sales Index contracted in February.
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The NAB Rural Commodities Index ticked up another 0.9% on a monthly basis in February - its eleventh consecutive gain to another record high.
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Fed lifts rates – more to come.
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COVID disruptions have continued but State economies have been resilient and labour markets are strong.
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NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
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Overall, 2022 continues to outperform 2021 and even pre-pandemic 2019.
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COVID and energy prices present sizeable risk to China’s ambitious growth target.
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Globally, the conflict between Russia and Ukraine has caused a significant spike in energy prices – reflecting the importance of Russia in the production and export of oil, natural gas and coal, in combination with limited additional supply elsewhere. Locally, the war in Europe poses risks on both the activity and nominal sides of the economy, uncertainty is now highly elevated – but the central-case for Australia’s economy largely remains strong.
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Russian invasion triggers uncertainty & volatility in global markets.
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2022 started slowly on account of the Omicron wave but is now really picking up, notably in areas like hospitality and clothing and footwear.
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Unemployment to fall below 4%; inflation risks build.
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Activity, employment strengthen as prices push higher.
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Overall, February saw strong gains for hospitality, with surging spending on bars, restaurants, pubs and accommodation, despite ongoing COVID circulation.
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China’s outsized property sector presents a major drag for growth in 2022.
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NAB's Online Retail Sales Index returned to growth in January.
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Rebound sets the stage for a strong 2022.
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Dean Pearson, NAB's Head of Behavioural and Industry Economics shares his views on the economy, including the impacts of labour shortages on Australian businesses across a broad range of industries and insights from NAB’s latest business survey.
Webinar
Solid start to Q1 activity data; Fed to start lifting rates in March.
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SME businesses shared in post-Delta rebound
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Our latest weekly data to 12 February shows a strong recovery in spending since January.
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Globally the Omicron variant of COVID-19 has spread rapidly; the sheer number of cases is disrupting economic activity as infected workers are forced to isolate. In Australia, we have revised up the expected rebound in Q4 GDP, but pulled down Q1 2022 as the spread of omicron weighs on the economy through both consumer caution as well as disruption to business.
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Latest COVID-19 wave has led to a soft start to 2022
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Consumers started 2022 in an understated fashion, following some big swings in late 2021.
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Strong rebound slowed by Omicron as inflation builds.
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Conditions deteriorate as Omicron peaks.
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As agriculture’s record run continues, what’s ahead for 2022.
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Housing market sentiment and confidence continues to moderate as pace of monthly house price growth slows.
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While the past two weeks’ data is a little less encouraging than our previous release, there does not appear to be a major deterioration.
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Pre-Omicron economy was confident but facing constraints.
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Dynamic clearing – shifting the message rather than broad policy towards COVID-19.
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In month-on-month terms, our NAB Online Retail Sales Index contracted again in December.
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While spending has softened, it is nowhere near as bad as some have reported and we had feared.
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Fed policy tightening brought forward.
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China enters 2022 with relatively weak momentum and considerable uncertainty.
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Omicron dampens confidence, price pressures continue.
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For Australia the Q3 national accounts showed a smaller hit to activity than we had expected but we continue to see a very strong snap back in activity in Q4. Globally, advanced economy growth was robust in Q3, and a similar outcome is expected in Q4 albeit with a shift in the source of growth away from Europe towards the US and Japan.
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Our latest data for the fortnight to 11 November shows retail pulling back somewhat, following what looks to be a Black Friday - Cyber Monday surge two weeks ago.
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Global recovery continues but inflation is high and Omicron a concern.
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November data show little underlying improvement from October’s weakness.
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Activity snaps back in Q4, pre-Delta GDP within reach
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Consumers continue to power ahead across the country, with post-lockdown spending gains consolidated in our November data.
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Conditions stabilise as reopening progresses
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Q4 GDP looking strong; Fed turning more hawkish
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Housing values continued to rise last month, but conditions are diversifying as stock levels rise and affordability pressures mount.
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Spreading the wealth: Common Prosperity may start to address inequality in China.
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Our latest data shows consumers continuing to power ahead across Australia.
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Large fall sets up “W-shaped” recovery.
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NAB Online Retail Sales Index contracted in October, following on from lockdown enhanced strong growth in recent months.
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NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
Fed Monetary Policy Update.
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One in 10 Australians has moved during the pandemic, with many leaving capital cities for greener pastures. Here, the behavioural economist Dean Pearson explains what this means for house prices in 2022.
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Consumer spending continues to trend higher in NSW, Victoria and the ACT well after lockdowns ease.
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NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
Partials point to a weak start to Q4, with production and retail soft and investment contracting.
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We have trimmed our global economic forecasts this month to 5.7% for 2021, however should this occur, it would still be the strongest rate of growth since 1973. For Australia, our internal data and NAB Monthly Business Survey indicate the economy is again rebounding strongly as NSW and Vic reopen following the extended lockdowns through mid-2021.
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
Supply side continues to constrain activity, driving inflation higher.
Insight
Retail conditions in lockdown-affected areas have clearly been challenging for many businesses, but with reopening here, consumers are bouncing back and spending has returned.
Insight
Rates lift-off brought forward as rebound begins.
Insight
To the market: China’s power crunch is forcing much needed energy reform.
Insight
Conditions and confidence rise out of lockdown.
Insight
Australian housing values rose 1.5% last month, a similar result to August and September. However, the trend shows the market is continuing to slowly lose momentum since moving through a peak monthly rate of growth in March 2021, when values were up 2.8%.
Insight
Growth slows in Q3 but inflation still elevated.
Insight
The NAB Online Retail Sales Index continues to exhibit considerable strength.
Insight
SME conditions fall under lockdowns.
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
The good news just keeps rolling on for Australian agriculture, with already very good seasonal conditions boosted by the increasing possibility of a La Nina event, combined with ongoing commodity price strength.
Insight
Conditions and confidence hit by lockdowns in Q3.
Insight
The first full week of Sydney reopening and NSW jumped (up around 15% in the week – reflecting hospitality and personal services (e.g. hairdressers) reopening, but other states showed weakness.
Insight
Market data shows house prices slowing, sales easing, and building approvals falling, the survey is also pointing to a market that has passed its peak.
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Insight
A series of crises stalled Q3 growth and present downside risk to the outlook.
Insight
We have revised our global economic forecasts lower – to 5.9% for 2021. For Australia, a very sharp fall in activity in Q3 is locked in however we continue to expect a solid rebound in Q4 , and strong growth continuing into early 2022.
Insight
Energy woes add to persistent supply bottlenecks in slowing global recovery.
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
Reopening in NSW, soon to be followed by the ACT and Victoria, should give retail spending a good kick along in October and November.
Insight
Waiting for the rebound after Q3 lockdowns.
Insight
Confidence rebounds on the back of roadmaps, vaccination.
Insight
Australian housing values rose 17.6% higher over the first nine months of the year and 20.3% higher over the past 12 months. The annual growth rate is now tracking at the fastest pace since the year ending June 1989.
Insight
Encouraging news on the data front this week.
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
The Fed is set to taper – but rate hikes are still a way off
Insight
Debt bomb – managing the fallout from Evergrande will be a key challenge for Chinese authorities.
Insight
NAB Online Retail Sales Index continued to grow in August, driven by department store sales and three key sales states, NSW, VIC, and QLD.
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
Alan Oster, NAB's Group Chief Economist, shares his view on the different impacts COVID-19 has had on industries and provide a broader macroeconomic outlook on the Australian economy.
Webinar
COVID 19 continues to be the main driver of growth both in the recovery phase and as the Delta variant spreads. With vaccines looking promising 2021 looks like being a bounce back year.
Insight
COVID 19 remains the main risk to the global economic outlook, while in Australia the key risks to our forecasts remain the timing and pace of the easing in restrictions, and further out, the underlying pace of growth as the impact of policy measures fades.
Insight
Strong economic growth in Q2 is set to falter in Q3.
Insight
COVID restrictions hit retail in August, building on existing imbalances in China’s economy.
Insight
A near term hit to GDP before the recovery continues.
Insight
Our data mapping points to another retail sales fall in August.
Insight
Confidence and conditions tick up.
Insight
This week's consumption data results give us some cautious optimism for Q4.
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
Despite many parts of the country remaining in some level of lockdown, the housing boom continued to roll on, with national home values rising another 1.5% last month.
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
A soft outcome ahead of a Q3 fall.
Insight
Lockdown passion projects spur online sales.
Insight
NAB Rural Commodities Index hits a record high sitting 12.6% above August 2020 levels.
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
China’s Delta outbreak likely to slow growth in the near term
Insight
Due to lockdowns, we expect to see a large hit to activity in Australia in Q3. Our global growth forecast for 2021 is marginally weaker this month, 6.2% compared with 6.3% previously.
Insight
Consumption is now down around 3%, compared to the start of 2021.
Insight
Differing vaccination rates are driving a divide between economic groups.
Insight
GDP to fall but recovery will resume as lockdowns end.
Insight
NABs data mapping points to retail sales falling substantially in July.
Insight
Although the pace of housing growth has slowed, values continue to rise at a rate that is well above average across most areas of the country.
Insight
Confidence and conditions fall further with ongoing lockdowns.
Insight
NAB Online Retail Sales Index accelerated in June, following the May rebound.
Insight
Approaching the peak: China’s long-term coal consumption looks set to decline.
Insight
Q2 GDP growth below expectations but still strong.
Insight
Very strong SME business conditions in Q2.
Insight
Consumption is down almost 7% compared to the start of 2021.
Insight
Lower currency continues to buoy Australian agriculture.
Insight
Housing market sentiment lifts to a new high and dwelling prices now expected to grow around 19% in 2021 and 4% in 2022.
Insight
Conditions at a record high in Q2.
Insight
COVID-19 remains the most significant risk for our global outlook. While in Australia, the current virus outbreak in NSW and associated lockdowns/border closures highlights the uncertainty around economic forecasting at present.
Insight
China’s economy grew largely as expected in Q2, but imbalance between production and consumption persists.
Insight
Compared to the start of 2021, consumption is now down around 0.7%.
Insight
Advanced economies open up again; can vaccines ensure it’s for the last time?
Insight
Recent lockdowns look to have dented retail spending in areas hard-hit in 2020, notably hospitality and clothing and footwear.
Insight
Lockdown disruptions but expect recovery to continue.
Insight
One, two, three: Can China counter its demographic drag by raising its birth rate?
Insight
Wages growth and expectations.
Insight
Confidence falls on virus fears.
Insight
Housing market ended the financial year on a high note. Despite another month of strong gains, there are signs that some heat is coming out of the market
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
The NAB Online Retail Sales Index grew in May, after a contraction in April.
Insight
Victorian spending has bounced back to above the national average.
Insight
A new phase of growth emerges across the states following a fast rebound.
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
Fed – Still dovish but less than previously thought.
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
Agricultural commodity prices continue to perform generally very well, rounding out a generally strong period for many agricultural producers.
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Insight
Buyers beware: China’s consumers have remained subdued during the COVID-19 recovery.
Insight
Growth slowing as base effects wash away; consumers continue to lag industry.
Insight
The weakness in consumption spending continued last week.
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
Advanced economies continue recovery, as Emerging markets face further COVID-19 struggle.
Insight
Retail trends continue to point to the COVID-induced consumer boom having largely run its course.
Insight
A healthy outlook for the economy beyond the rebound.
Insight
Business conditions continue to boom.
Insight
CoreLogic’s national Home Value Index up 2.2% in May - a stronger result compared with the 1.8% lift in April.
Insight
The slowdown in consumption continues.
Insight
NAB Online Retail Sales Index contracted again in April, after a revised contraction in March.
Insight
Q2 growth still looking strong; April inflation surprise.
Insight
Q1 2021 - GDP continues to recover.
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
Retail spending is down around 5% compared to the start of the year.
Insight
With life in Australia currently very close to pre-pandemic “normal”, the boom in household goods and department stores has largely subsided.
Insight
Smaller base effects meant smaller growth rates in April but retail sales are still lagging.
Insight
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest economic news. Listen now.
Podcast
Business confidence and conditions hit new highs.
Insight
Housing values are still rising at a rapid pace, up 6.8% over the past three months to be 10.2% higher than the COVID low in September last year.
Insight
Encouraging headline results for the week ending 1 May, further underline our view that the Australian economy is recovering well from the pandemic.
Insight
NAB Online Retail Sales Index contracted in March, after a revised slight contraction in February.
Insight
Buy, buy, bye: political tensions could impact Australia’s trade relationship with China.
Insight
Commodity prices stay strong amid rising Australian Dollar.
Insight
GDP growth off to a good start in early 2021 and set to accelerate.
Insight
Confidence pulls back from record high, but conditions lift.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Momentum builds.
Insight
Retail a little better (but still soft) and hospitality is showing strong performance after a very tough 2020.
Insight
NAB has upgraded its forecasts for dwelling prices, which are now expected to rise 14% in 2021 and 6% in 2022.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Quarterly data point to weak start to 2021, but signs of consumers returning is positive.
Insight
High frequency indicators continue to point to a recovery in the global economy in early 2021. In Australia, the economic recovery continues at a brisk pace with forward indicators pointing toward ongoing strength in activity and the labour market, even as some fiscal support is wound back.
Insight
Uneven recovery set to continue into 2022, as EMs wait for vaccines.
Insight
2021 is already showing signs that the retail sector is returning to something resembling “normal”, which is likely to see lower retail spending in areas like household goods, electronics and similar sectors.
Insight
Healthy momentum leading into the JobKeeper wind-up.
Insight
Business conditions reach a record high.
Insight
The national home value index recorded a 2.8% rise, the fastest rate of appreciation since October 1988.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Don’t forget about me: lower skilled workers could be left behind by manufacturing’s evolution
Insight
The NAB Online Retail Sales Index slowed (40.7% y/y).
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
One year on from the onset of the first Australian coronavirus lockdowns.
Insight
2021 should be a year of strong growth
Insight
Rising commodity prices underpin positive outlook.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Don’t be fooled by surging annual growth rates – momentum is set to slow across 2021.
Insight
Rising restrictions to combat a resurgence in the spread of COVID-19 towards the end of 2020 slowed the global recovery but did not derail it. In Australia, the economy continues to recover at a rapid pace.
Insight
US fiscal stimulus to add further impetus to global economic recovery.
Insight
With many CBD office workers still working from home, this week we consider the impact of the pandemic on key CBD sectors.
Insight
GDP fully recovered by Q1, but spare capacity remains.
Insight
How will consumers respond as 2021 rolls on and the prospect of some kind of post-pandemic normality comes into view via vaccination?
Insight
Business conditions bounce, confidence rises further.
Insight
Momentum continued to build across Australian housing markets last month, as values rise at the fastest rate in seventeen years.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
While last year was one of the most challenging for schools in Australia’s history, schools will adapt post-COVID.
The NAB Online Retail Sales Index returned to growth in January, after a short sharp contraction in December.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Digital divorce: forces are pushing for a technology split from China.
Insight
The rebound continues.
Insight
Global pandemic boosts feeling of Australia as the lucky country.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Consumption growth continues to moderate in the latest NAB Data Insights release for the week-ended 20 February 2021.
Insight
2021 set to be a year of very strong growth.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Businesses are having to adjust to a new kind of consumer, but it remains unclear which behaviours and sentiments will stick.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
The resurgence of COVID-19 in many parts of the world towards the end of 2020, has had a negative impact on the global recovery. Whereas in Australia, economic activity continues to rebound strongly.
Insight
SME confidence hits a record high as conditions rebound
Insight
Beyond near-term weakness outlook brightens on vaccine roll-out and fiscal support.
Insight
Consumption growth continues to moderate in the new year, but remains positive overall.
Insight
Housing values continued to rise through the first month of 2021
Insight
GDP growth and the labour market continue to surprise.
Insight
January’s cashless retail result represents respectable growth, following significant volatility late last year.
Insight
Business confidence rises, while conditions pull back.
Insight
Australian agriculture set for solid year.
Insight
Despite ongoing economic challenges, the NAB Residential Property Index ended 2020 at a survey high +45 points.
Insight
The recovery continues.
Insight
The NAB Online Retail Sales Index contracted in December, after moderate growth in November.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Meet the new boss: a Biden Administration doesn’t mean a return to Obama-era China policy.
Insight
Recovery lost momentum at end of 2020; hope for a better 2021
Insight
Overall spending growth slowing, but still positive in year-on-year terms
Insight
Business conditions improve to multi-year highs.
Insight
Recovery from COVID-19 continues across Australia
Insight
China’s economy enters 2021 with momentum, but expected to slow across the year.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Consumption spending growth resumed in the week ending 9 January, up 4.1% on the same week last year.
Article
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
What do alternative indicators suggest about China’s COVID-19 downturn and recovery?
Insight
China’s consumers finally remerging
Insight
Signs of slowing, but vaccine a positive
Insight
Globally GDP rebounded strongly across all the major advanced economies in Q3, however the spread of COVID-19 remains a key risk to the outlook. In Australia our outlook now resembles the best-case scenario we outlined at the start of the pandemic, although large uncertainties remain, even with a vaccine seemingly close to being rolled out.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Widespread rebound in Q3 GDP, but COVID continues to disrupt global economy.
Insight
We take a closer look at how selected retail and hospitality spending in the CBDs of Melbourne and Sydney have fared this year.
Podcast
Stronger near-term recovery in activity and a lower peak in unemployment.
Insight
Victorian retail sales are now tracking just behind New South Wales and Queensland on a year ended basis. Western Australia remains the strongest performer, but other states are catching up.
Insight
Australia's housing market continued to recover, with dwelling values up 0.8% over the month.
Insight
Further gains as the economy continues to open up
Insight
The NAB Online Retail Sales Index contracted in October, after four strong months of growth.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Large rebound from COVID impacted Q2.
Insight
How high can Australian cattle prices go?
Insight
NAB’s latest Data Insights saw consumption spending growth slow to 2.2% % y/y in the week ending 21 November (4.9% last week).
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Housing market sentiment bounced back in Q3, but still weak as VIC continues to weigh heavily.
Stronger activity and a smaller hit to unemployment in the near term.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Q3 bounce; but COVID-19 risks remain
Insight
Consumers gradually returning to the market, with China still reliant on industry.
Insight
COVID-19 remains a major factor influencing the global economy. While in Australia the RBA has lowered rates to a record low of 0.1% and announced a QE program.
Podcast
After two steps forward, European lockdowns are a step back for the recovery.
Podcast
Overall spending increased 7.0% in Victoria (first positive result since the first week of August), second only to WA (8.3%).
Insight
Regional housing markets continued to outperform the capital cities in October.
Insight
NAB Forecasts fundamentally unchanged – but large uncertainties remain.
Insight
The retail sector has proven to be very resilient this year, although many consumers have changed their spending behaviour, leading to a boom for some retailers and bust for others.
Insight
Business confidence rose to its highest level since mid-2019, led by a large gain in Victoria.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
With COVID-19 restrictions easing across much of the country, consumer anxiety has continued to moderate and spending behaviours are shifting.
Insight
Our NAB Online Retail Sales Index continued to grow, albeit slowing in September.
Insight
China looking inward as the external environment has deteriorated.
Australians are expecting lasting changes in their post COVID behaviours, but a growing number of us are yearning to return to our “old lives”.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
An improvement across the Survey – but some way to go.
Insight
SME Conditions & Confidence better in Q3, but still weak.
Insight
Consumer spending fell for the first time in 6 weeks.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Market and seasonal conditions strengthen Australian agriculture.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Sustained large budget deficits likely regardless of the victor, with Biden the frontrunner.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
China’s recovery remains industrial led, but consumers are finally emerging.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
We've seen a small (0.2%) increase in overall consumption spending, for the week ended October 10.
Insight
COVID-19 put the brakes on already stalling foreign investment.
Insight
Listen to the full podcast now. If listening on a mobile device, click listen in browse.
Podcast
Consumer confidence increased, new listings rose, and six of the eight capital cities recorded a rise in home values over the month.
Insight
Overall, the survey saw a modest improvement in September.
Podcast
While still contracting, Vic (-7.4%) spending falls have moderated, with an improvement in non-lockdown areas.
Insight
Growth in the NAB Online Retail Sales Index slowed a little from the record set in July.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Recovery continues, but risks remain.
Insight
The RBA continues to signal further monetary easing is likely.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
For the week ended September 12, NAB data showed a -2.5% year-on-year fall in overall consumption spending.
Insight
Will Chinese manufacturers lose in the post-COVID world?
Insight
China’s industrial sector still driving the recovery, with consumers lagging.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB’s latest in-depth report reveals how Australians and the health system are coping with COVID-19.
Article
Insights into Australia's Pharmacy sector post COVID-19 through the eyes of pharmacists.
Insight
Globally, after massive falls in GDP in Q2 across the advanced economies, the latest indicators are pointing to a substantial, but incomplete, Q3 rebound. In Australia, GDP fell by 7% in Q2 – the largest fall in the history of the quarterly national accounts.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Economic rebound in Q3, but signs that growth momentum is slowing.
Podcast
Australian home values moved through a fourth month of COVID-induced falls.
Article
VIC virus & reduced Government support means flat H2 2020. Larger falls through 2020 mean better 2021. But recovery still tough & long.
Insight
Retail sales have been resilient recently, given restrictions on consumer activity and the large hit to the Australian economy.
Podcast
Conditions soften, while Confidence is still weak.
Podcast
For the week ended August 29, NAB data shows a -2.5% year-on-year fall in overall consumption spending - the first negative read since very early-May.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Record year on year growth, boosted by Victoria.
Insight
Q2 GDP fell by a massive 7% (-6.3% y/y), confirming the large hit to economic activity as a result of the shutdown to limit the COVID-19 pandemic.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Latest restrictions will hit Victoria’s economy hard, but COVID-19 has impacted all states.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
For the week ended August 15, NAB data shows a -1.5% year-on-year decline in overall consumption spending.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
The global economy continues to recover from the impact of COVID-19. However, there is still a long way back with progress. In Australia, we have downgraded our forecasts due to the containment measures in Victoria.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Global recovery continues but it is uneven and still a long way back to ‘normal’.
Insight
Our internal data point to a moderate decline in July, having stabilised at a surprisingly buoyant level after the rollercoaster earlier this year.
Podcast
Conditions continue to recover, but confidence remains fragile.
Insight
Record low interest rates, government support and loan repayment holidays for distressed borrowers have helped to insulate the housing market from a more significant downturn.
Insight
Medium term outlook buoyed by positive growth in the Industrial sector despite challenging outlook across Office & Retail asset classes.
Webinar
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB data for the week ended August 1 suggests the trend decline in consumption spending seen in recent weeks has continued.
Insight
VIC virus shutdown makes the outlook significantly worse with no quick bounce back, with unemployment and poor confidence big issues.
Insight
Appreciating AUD takes gloss off positive seasonal outlook.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Our NAB Online Retail Sales Index data returned to more moderate growth in June.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
The SME sector sees a large COVID hit.
Insight
Food service spending under pressure amid new restrictions.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
A large deterioration in the budget position and a pessimistic economic outlook. Listen now.
Podcast
NAB’s latest Data Insights highlight a slowdown in consumption spending in recent weeks.
Insight
The impact of COVID-19 sees a large deterioration in conditions.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
The global economy is forecast to contract by 3.5% in 2020, before increasing by 6.0% in 2021, and 3.9% in 2022.
Podcast
China’s old economy drives growth to unexpected high in Q2.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Global recovery continues but virus outbreaks a major risk.
Insight
Extent of the fall in Q2 GDP revised sharply down – as is 2020. But pain still large and long lasting. With new virus uncertainties.
Insight
Our data mapping points to a moderate fall in June, following massive swings in March, April and May suggesting there has been some stabilisation in retail sales.
Podcast
Both business conditions and confidence continued to rebound in June – though it is important to note they are still weak in level terms.
Insight
The impact of COVID-19 on the economy has caused sentiment in housing markets to collapse in Q2, with confidence also falling to record lows.
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB’s latest Data Insights report shows quite strong consumption spending leading into the Victoria shut down.
Insight
Despite values being down in June, estimates of market activity showed a further improvement from the April low.
Insight
NAB Private Customer Executive Greg Morris hosts NAB Chief Econonist Alan Oster, sharing his thoughts on the current state of the Australian economy and the road to recovery.
Webinar
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
The NAB Online Retail Sales Index contracted slightly in May, after recording the most rapid growth in the series history in April.
Insight
Record cattle prices face risks amid global pandemic.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB Private Customer Executive Greg Morris hosts Charter Keck & Cramer Chairman Scott Keck and NAB Valuations Manager Alex Dimou to discuss the Melbourne residential property landscape and share their positive outlook for the market.
Webinar
NAB’s consumption spending index points to a levelling off in spending.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB Customer Executive GEC Biljana Nikolova explores the impact of COVID-19 on Australia’s NFP sector with Head of Economics Research Dean Pearson and CEO of Batyr Nic Brown.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Consumer anxiety fell in the June quarter despite very weak levels of economic and employment activity.
Insight
Suppliers are still searching for demand.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
How Australians are changing their behaviours, their biggest fears, and what of the “new normal”.
Podcast
Extremely large falls in Q2 GDP for many advanced and emerging economies are likely, while in Australia we expect a large fall of around 8.5% in Q2, following the 0.3% decline in Q1.
Despite the loss of momentum in housing value growth, buyer numbers have shown a solid rise in May.
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
The trend improvement in consumption-based spending remains positive, but NAB’s latest data read suggests it may be levelling off and even slowing a little.
Insight
Long climb back to ‘normal’ levels of global activity has started.
Insight
A small fall in GDP in Q1 expected to be followed by a very large fall in Q2 – followed by an extended period of recovery.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
The overall trend in consumption spending continues to improve, but in 4-week moving average terms is down 7.8% over the same time last year and 5.8% since the start of 2020.
Insight
NAB Group Chief Economist Alan Oster unpacks the latest consumption data and the results are encouraging.
Podcast
Biljana Nikolova, Customer Executive GEC explores the implications of the COVID-19 pandemic on Australia’s Education sector with Dean Pearson, Head of Economics Research and discusses with Jack Stevens (CEO, Edstart) how NAB and Edstart are supporting schools and parents during this challenging time.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
The latest economic data from China continues to highlight some challenges in its recovery phase.
We have revised down our forecasts for global GDP and now expect -3.8% in 2020, while we expect Australian GDP to fall by 8.5%.
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Large falls in consumption-based spending although the pace of decline looks to have stabilised. However business payment inflows have weakened further.
Insight
A massive contraction in global activity has occurred due to COVID-19.
Our forecasts are broadly unchanged – we still expect a fall of 8.5% in GDP in H1 2020 before a rebound in growth in Q4.
Improved seasonal conditions drive a 17-point jump in NAB’s National Agribusiness Conditions Index.
Podcast
Market activity dropped sharply from the second half of March and through April.
Business confidence remains very weak despite a rebound in the month.
Insight
Brett Moore, Customer Executive Professional Services leads a discussion with NAB experts Alan Oster, NAB Group Chief Economist, Dean Pearson, Head of Economics Research and Mark Browning, NAB's Head of Residential Valuations in sharing their view on the varying impacts COVID-19 has had on the Real Estate industry.
Webinar
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB Residential Property Index rises to survey high in Q1, but confidence shaken by Coronavirus impact on economy.
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Impacts of Coronavirus on consumption based spending and business payment inflows.
Insight
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
NAB Group Chief Economist Alan Oster talks about the latest impacts of the Coronavirus. Listen now.
Podcast
Co-hosted by Biljana Nikolova - Customer Executive, Government, Education and Community and Shamal Dass - Head of Philanthropic Services, JBWere, this webinar includes guest speaker Alan Oster, NAB Group Chief Economist sharing NAB’s view on the economy; and Daniel Farrell - Associate Director, Rates, Global Markets shares his view on interest rate risk management.
Webinar
No state or territory will be spared from COVID-19 economic fall-out.
China’s economy sharply contracted in Q1; weakest growth in over forty years in 2020.
Hosted by Greg Morris - Customer Executive, NAB Private, and Kate Galvin - Customer Executive, NAB Health, this webinar includes guest speaker Alan Oster, NAB Group Chief Economist sharing NAB’s view on the economy.
Webinar
The global economy is in a deep recession due to the rapid and widespread escalation in Covid-19 containment measures since mid-March. While the domestic economy is now expected to see a contraction of an unprecedented speed and magnitude.
Global economy in its worst post-WW2 recession, recovery timing uncertain.
Unprecedented sharp recession coming as a result of COVID-19. Sharp deterioration in employment and prolonged high unemployment.
Insight
Business confidence saw its largest decline on record and is now at its weakest level in the history of the NAB Monthly Business Survey.
Article
March was the lowest monthly gain in national housing values and likely sets the tone for housing conditions over the coming months.
SME confidence declines ahead of the COVID-19 disruption.
Webinar
Rural commodities continue to climb.
Confidence deteriorates on the early impact of Covid-19.
Insight
Consumer anxiety and spending behaviours are changing rapidly in response to coronavirus fears and self-isolation.
Insight
How Australians are changing their behaviours and their biggest fears in response to the Coronavirus.
Insight
Rural commodities resilient amid COVID-19 crisis.
We've significantly lowered our global growth forecasts, and in Australia growth slowed confirming a below-trend pace of growth prior to any virus impact.
Housing values surged by 1.1% with 5 capital cities reaching new record-highs last month.
World growth to be hit hard in H1 2020 – at least – due to Coronavirus.
Soft Economy likely to be hard hit by COVID-19. Outlook heavily dependent on severity and how long disruption effects of the virus last.
Confidence heads lower and Conditions now neutral.
Special survey on the second round impact of recent bushfires.
We have revised down our forecasts for global growth in 2020 to 3.0%. While in Australia we now expect a small negative for Q1 2020 growth.
SME conditions and confidence edge lower.
Coronavirus to deliver a shock to global growth.
We have adjusted down 2020 GDP by 0.5% due to bushfires & Coronavirus impacts, but boosted for 2021. RBA forecasts a big stretch.
Good January rainfall across key agricultural production areas drove the NAB Rural Commodities Index 4.6% higher this month, despite the impact of bushfires and coronavirus.
Housing market update shows the rebound in Australian housing values has continued into 2020.
More of the same in early 2020.
Confidence declines, while conditions remain below average.
NAB Residential Property Index rises to a near 6-year high and is now positive in all states.
The final monthly business survey of 2019 provides further evidence that activity stabilised in Q4.
The cost of living remains the single biggest driver of consumer anxiety, despite low levels of economy-wide inflation. To understand why, we asked Australians to tell us which costs are adding most to their living expenses.
NAB’s annual pulse check of life in Australia confirms it is, with Australians in strong agreement that our country remains a great place to live.
China’s ends 2019 in line with expectation.
China’s industrial sector appears to have stabilised ahead of new trade deal.
Unchanged forecasts for Australia with expected growth of 1.75% while across the globe we expect US growth to ease somewhat further and Japan’s economy is set to contract in Q4.
Private demand still “running on empty”. Broadly unchanged forecasts but concerns to the downside. Fiscal policy help unlikely.
The housing market recovery has continued to gather some pace through with our national index up 1.7% last month.
What does next year hold for Australian business owners? Listen to our podcast for NAB Chief Economist Alan Oster’s 2020 vision on the challenges and opportunities ahead.
Business conditions tracked sideways in the month, and appear to have stabilised at low levels, after declining significantly between mid-2018 and 2019.
High cost of water dries up basin profit margins.
Hopes of a US-China ‘Phase One’ trade agreement have lifted financial markets. While in Australia we've lowered our near-term forecast for growth.
Most of China’s indicators relatively weak year-on-year, however, the 70th anniversary of the founding of the People’s Republic of China at the start of the October has made this harder to gauge.
Near term growth prospects still weak, but potential trade deal offers some upside.
Private demand still stalled. Broadly unchanged forecasts but slightly lower growth in the near term. Policy help delayed.
Conditions and confidence each saw a small improvement in the month with conditions edging up 1pt and confidence lifting 2pts – though both remain below average.
Latest report shows a 1.2% rise in national dwelling values, delivering the fourth straight month of rising values.
Student wellbeing on the agenda for schools.
NAB Residential Property Index moves back into positive territory for first time since mid-2018.
Trade war finally shows its impact on China, as industrial sector drags Q3 growth lower.
Confidence declines, while conditions remain below average.
Wheat crop cops sharp downgrade amid tough spring.
Consumer anxiety rises as concerns over the economy grow.
With growth having slowed in Q2 2019, there appears limited prospect of a turnaround in Q3 – given the relative weakness in business surveys, market expectations and the deteriorating global trade environment.
Housing market made further progress towards a recovery in September, recording the third consecutive month of gains.
US opens new fronts in the trade war.
Unchanged forecasts with low rates expected to persist.
Business conditions rose 1pt in September to +2 index points. This continues the below average run of business conditions but suggests that the trend weakening since mid-2018 has slowed.
Online retail rebounds after two weak months with the largest spend category Homewares and Appliances being a key contributor, although sales growth for this category has been relatively weak over the past year.
The Australian economy grew by 1.4% over the year to the June 2019, its weakest growth since 2009.
Pork shortfall to maintain higher inflation in the near term.
India’s economy needs a stimulatory kick start, with no guarantees of recovery.
Seasonal conditions and declining winter crop forecasts reflect drop in NAB Rural Commodities Index.
RBA to cut in October and again in December, taking the cash rate to 0.5% by year's end.
China’s industrial sector struggling ahead of the latest round of trade measures.
Crude oil markets may tighten significantly following weaponised drone attacks on the world's largest oil refinery at Abqaiq on Saturday.
Global economic growth slowed further in Q2 2019. Major advanced economy (AE) GDP growth declined to its slowest pace since mid-2016.
Recovery in housing values accelerated in August.
Global growth slows further as trade disputes escalate…again.
In US dollar terms, NAB’s Non-Rural Commodity Price Index is forecast to increase by 1.8% quarter on quarter in Q3 2019.
Cash Rate to 0.5% by February; more stimulus by mid 2020 unless the Government steps in.
Below-trend growth and low inflation still expected as downside risks build. We have inserted another rate cut(s) in early 2020.
Both business confidence and conditions declined in the month, with both now at +1 index point – well below long-run averages.
Our NAB Online retail sales index data indicates that sales growth was negative in July 2019, following on from an almost flat result in June.
Resilient cattle and lamb prices sustain flat NAB Rural Commodities Index.
The latest escalation in the US-China trade war has reverberated through financial markets. The policy response will be important - we now expect two further 25bp cuts in the fed funds rate this year. China is also likely to use policy measures to offset any tariff impact, including allowing further depreciation of its currency.
China’s economy is continuing to slow, even before the latest round of US tariffs (and China’s retaliation), meaning there’s further downside risk.
US dollar NAB’s Non-Rural Commodity Price Index is forecasted to increase by 2.1% yoy in Q3 2019, however underlying trends remain highly mixed. Higher export prices for LNG and iron ore (despite more recent spot price falls) are the key contributors, while both thermal and metallurgical coal are weaker, as are most base metals.
Below-trend growth and low inflation – another rate cut ahead.
We're seeing below average confidence and conditions. The picture remains unchanged since last month - business sector has lost significant momentum since early 2018 and forward looking indicators don't point to an improvement in the near term.
Have dwelling values finally found a floor in July?
How successful has China’s deleveraging program been in managing the country’s debt?
Our NAB Online retail sales index data indicates that sales growth was negative in June 2019, following on from strong growth in May.
Our analysis suggests that the real exchange rate has more of an impact on growth than earlier RBA analysis.
Despite an up-tick in confidence, conditions deteriorate.
Reserve Bank research suggests that the two rate cuts to date will boost growth by 0.25-0.4pp over two years and lift inflation by only 0.1pp over two to three years.
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.
Consumer anxiety fell for the second straight quarter in Q2 2019, led by a post-election fall in anxiety arising from government policy.
Cattle markets and southern rain stabilises NAB's Rural Commodities Index
Economic growth is slowing as public demand continues to be the main driver of GDP growth.
NAB’s Non-Rural Commodity Price Index is expected to increase by 0.9% quarter on quarter in Q2 2019, a little stronger than anticipated in May.
NAB fine-tunes timing of rate call: RBA to cut in July to 1%
The federal election and lower expected interest rates have contributed to a rebound in business confidence- but not business conditions.
Policy makers ready to stimulate as signs of weakness grow.
Although dwelling values fell in May, the pace of decline continued to ease; a trend that has been evident since the beginning of 2019.
The Bigger Picture – A Global and Australian Economic Perspective – May 2019.
RBA to cut to 0.75% in November.
Governor Lowe has said that reducing unemployment to the bank’s 4.5% estimate of the NAIRU should return inflation to the 2-3% target band.
Weakness in private demand to continue. Policy stimulus needed – fiscal, structural and monetary.
Can China weaponise rare earths to open a new front in the trade war?
Confidence saw a post-election spike in May but conditions decline further with the private sector continuing to lose momentum.
The RBA is expected to cut the cash rate on Tuesday, with a follow-up cut expected in August.
The RBA will be helped by looming personal income tax cuts and a relaxation of prudential regulations on mortgages.
Shock election result sees the unexpected re-election of the Coalition government
Looking for work: the health of China’s labour market is still hard to ascertain.
RBA to cut in June with a risk it eventually cuts below 1%.
The Bigger Picture – A Global and Australian Economic Perspective – May 2019.
Weaker economic trends even before trade tensions heat up again.
Reflecting the sustained strength in iron ore prices, NAB’s Non-Rural Commodity Price Index is forecast to increase by 0.4% qoq.
Surprise jump in conditions last month was unwound this month – with business conditions, confidence and forward orders now all below average.
This week, the labour market dominates in Australia.
Australian dwelling values fell half a percent last month as the pace of home value declines continued to ease.
Overall, the NAB Rural Commodities Index rose 1.1% in April, largely reflecting higher cattle, lamb, dairy and cotton prices, offsetting further declines in grain.
This week we’ve examined excess capacity in the labour market.
Consumer anxiety moderated in Q1 2019 but remains above year earlier levels.
Q1 GDP – headline growth overstates strength, but still a good result.
Conditions ease further, confidence turns negative
Deterioration in conditions in most states, with current momentum negative. Household sector weakness evident, investment still ok (outside mining), while agri. facing easing prices and needs rain. Housing sector downturn, population growth centred on the eastern states, agricultural prices easing.
Conditions continue to ease and confidence turns negative
Credit surge keeps growth stable in Q1, but will the taps stay on?
Crashing cars: how deleveraging has hit China’s automotive sector
In USD terms, NAB's Non-Rural Commodity Price Index is forecast to fall by 1.9% qoq in Q2 2019.
Conditions rise while confidence continues a below average run.
The bigger picture – A global and Australian economic perspective.
In USD terms, NAB’s Non-Rural Commodity Price Index is forecast to increase by 3.1% qoq in Q1 2019.
National dwelling values have returned to levels last seen in September 2016, and values have fallen over fourteen of the last sixteen months.
Business conditions fell by 3 pts to +4 index points in February, driven by declines in profitability (now +1) and trading (+8) sub-indexes. Employment was unchanged at +5. Confidence fell 2pts in the month to +2 index points.
Two cuts in 2019
The AUD/USD was conflicted in February, as improvements in risk sentiment and higher commodity prices pulled the currency higher, but a softer domestic economic outlook and a more dovish RBA acted as an offsetting force.
New NAB data reveals key factors for the wellbeing of small business owners.
Year of the Pig brings an uncertain outlook
The bigger picture – A global and Australian economic perspective.
Confidence and conditions continue to ease
In USD terms, NAB’s Non-Rural Commodity Price Index is forecast to increase by 2.7% this quarter – driven almost entirely by the upturn in iron ore prices.
Business conditions saw a moderate rebound in January after falling sharply in December.
Business conditions continued to ease in Q4 and while they remain above average, forward looking indicators point to potential further weakness.
Consumer anxiety reaches its highest level in over 3 years as slow income growth, high debt levels and weaker growth in household wealth weighed on households and their spending.
New research shows what Australians fear most for our nation’s future.
The AUD/USD traded in a larger than usual range in January.
Conditions end the year on a concerning low.
China’s economy continues to soften, but our outlook is unchanged.
December witnessed the widest AUD/USD monthly range of the year (3.77 cents).
Economic growth is likely to equal its post-GFC high in 2018.
Turning 40: Charting the rise of China since reform and opening up
The NAB Rural Commodities Index fell 2.0% on a month on month basis in November, mirroring a 2.0% gain in October.
After rallying at the beginning of the month, AUD/USD mostly range-traded between 72 and 73 cents during the rest of November.
Total NAB customer spending grew 7.0% y/y in Q3 2018 - up from 5.6% in the previous quarter and 3.0% in the same quarter a year ago.
Initial indicators for Q4 suggest the economy continues to perform strongly towards the end of 2018.
Hands in pockets: Chinese consumers are confident but that doesn’t show up in retail sales data
A healthy growth outlook but some concerns about the consumer.
Confidence and conditions ease.
The NAB Rural Commodities Index rose 1.8% in October, following a 6.5% jump in September.
The AUD/USD continued its downtrend in October, reaching a fresh low of 0.7023 on the 26th of the month, a level not seen since February 2016.
In seasonally adjusted terms, at 0.3%, online retail sales slowed in September. The 12 months to growth rate is also slower.
US economy continued to grow strongly in Q3.
Small and Medium Enterprise (SME) business conditions edged lower in Q3 2018 to +11, while SME business confidence fell to +2pts. While conditions have eased over the past two quarters, they remain well above average, though confidence has declined to below average levels.
Anxieties around future spending and savings plans, household finances, the economy, financial concerns and how these are impacting spending behaviours and levels of financial hardship.
The business conditions index decreased 2pts to +13 in 2018 Q3, but remains well above its long-run average. Business confidence also fell, declining 4pts to +3 index points, a little below its historical average.
The NAB Cashless Retail Sales Index gained 0.2% in September on a month-on-month basis, its weakest result since April this year. Five out of six major categories grew in the month; while other retailing contracted.
The lure of cash remains, even as younger Australians embrace cashless payments.
In US dollar terms, the NAB non-rural commodity price index rose marginally in Q3 2018 – increasing by 0.4% qoq. The strong upturn in the first quarter of this year contributed to a much more significant increase in year-on-year terms – up by 8.2%.
The bigger picture – a global and Australian economic perspective.
Solid headline growth masks divergent trends.
A strong first half and continuing near term momentum but slowing into the medium term.
Business conditions seem to have stabilised at high levels in recent months following some sharp falls earlier and the dip in confidence last month appears to have been temporary.
Online sales growth slower over the month and year
September was a challenging month for the AUD/USD.
China’s consumers aren’t ready to drive the economy’s growth.
Recent tariff announcements are a modest negative for growth in US and China although Chinese policy will look to offset the impact.
The NAB Cashless Retail Sales Index gained 1.1% in August on a month-on-month basis, following a gain of 0.7% (revised) in July.
The bigger picture - a global and Australian economic perspective.
Growth at a multi-year high but set to slow as risks build.
A strong first half and easing downside risks.
The business conditions index rose by 2pts to +15 index points in August, recovering some of the ground lost in recent months. Business confidence fell 3pts to +4 index points and is now below average.
International and domestic events have added to the AUD/USD volatility.
Another decent outcome.
US economy still strong, but trade concerns won’t go away.
Reasonable growth.
Total NAB customer spending grew 5.6% y/y in Q2 2018, down from 6.8% in the previous quarter and 3.9% in the same quarter a year ago. It grew faster in metropolitan (6.5%) than regional (5.1%) areas.
Our expectation for the Australian economy is that GDP will increase by just under 3.0% in 2018 and 2019.
Consumer anxiety up steeply in Q2. Overall spending tightens as concerns about the economy and our household financial positions grow. Spending on utilities a key expense, and growing.
The NAB Cashless Retail Sales Index gained 0.9% in July on a month-on-month basis, following a gain of 0.5% in June.
China’s trade relationship with the European Union.
Global growth appears to have remained above average through the first half of 2018, but with our leading indicator pointing to a moderation in coming quarters, we think that this will represent the peak for this cycle.
Growth remains above trend, but risks a concern.
An unchanged economic outlook, but downside risks building.
The business conditions index fell by 2pts to +12 index points in July, continuing its run of declines since April. Business confidence ticked up 1pt to +7 index points, an around average level.
The NAB Rural Commodities Index gained 1.3% month on month in July, following a 1.4% gain in June. On a year on year basis, the index was down 0.3% in July.
The US economy grew strongly in Q2 2018, driven by a rebound in consumption and further solid business investment growth.
The markets somehow expected more from the Bank of Japan but there was swifter market reaction to news that the US and China might restart trade talks.
The US has boasted about the economic turnaround evidenced by Friday’s GDP figures.
Equity markets got a boost from the news Trump and Juncker have reached an agreement to halt further tariffs but tech stocks took a dent from the sharp fall of Facebook’s earning results.
Business conditions ease slightly.
Despite trade talks, shares continue to rise, but for how long? And what’s happening to Australian inflation – a temporary falter or the start of a softening trend?
The Bank of Japan’s changing approach to yield control and China’s policy to protect the economy had the most impact on markets today.
Today’s weekly includes the results of our recent survey of our readers' views and outlooks for the Australian economy and key financial market indicators.
The Yuan has served to undermine all of the gains in the AUD generated by yesterday’s good employment report.
Favourable business conditions persist.
Could slowing inflation cause the Bank of England to rethink the prospect of an August rate rise?
The NAB Cashless Retail Sales Index gained 0.5% in June on a month-on-month basis, following gain of 0.6% in May (revised from 0.8%).
The move higher in front end yields boosted the USD, although the greenback was already on the ascendency early in the overnight sessions.
The global economy remains in reasonable shape right now despite some pressures on Emerging Market economies.
Trade risks to the fore.
The NAB Residential Property Index fell sharply in the June quarter 2018, down 17 points to +6 to sit at its lowest level since mid-2016 and well below its long-term average (+14).
Forecasts broadly unchanged but new risks to watch.
The business conditions index ticked up by 1pt to +15 index points in June, after easing in the previous month. The business confidence edged down 1pts to +6 index points, to be around its long-run average level.
The NAB Rural Commodities Index gained 1.4% month on month in June, following a 3.1% gain in May. On a year on year basis, the index was down 2.9% in June. The monthly gain reflects strong lamb, wool and cotton prices.
Risk to world growth from trade tensions escalating.
NAB’s USD non-rural commodity price index declined by over 3% q/q in Q2 2018. This only partially reversed the large gain made in the previous quarter and, as a result, it is still 7.5% higher than a year ago. The fall in Q2 mainly reflected a decline in iron ore and metallurgical coal prices, although LNG export prices – linked to the price of oil – rose.
Business innovation levels rebound; leadership pivotal to growth.
The NAB Cashless Retail Sales Index gained 0.8% in May on a month-on-month basis, following a flat read in April (revised from -0.6%).
Real GDP figures showed a pick-up in growth to 1.0% in Q1 (from 0.5% in Q4) lifting growth to 3.1% over the year.
Nationally dwelling values continued their downwards trend last month; the seventh consecutive month on month decline since the national index series peaked in September last year.
Cracks starting to show in the upward global growth momentum.
Economy off to a strong start early in 2018
The business conditions index decreased by 6pts to +15 index points, easing back from the historical highs seen in April. The business confidence index fell by 5pts to +6 index points, to be around its long-run average level.
GDP Growth rebounded in Q1, supported by the household and government sectors and export growth.
The NAB Rural Commodities Index gained 3.1% month on month in May after falling 2.8% in April. On a year on year basis, the index was down 4.4% in May. The monthly gain reflects strong grain, horticultural, dairy, wool and cotton prices.
Home ownership is a key to wellbeing according to new research from NAB
Solid start to the year.
Australia is a high performer in academic research – yet when it comes to commercialising that research, we rank last in the industrialised world. It’s time for change, says the Chairman of NAB.
My ‘whys’ haven’t changed over 25 years at NAB. I’m still driven by the impact economics has on our lives and the importance of delivering independent analysis that helps people and institutions make better decisions.
Total NAB customer spending grew 6.8% y/y in Q1 2018, up from 5.0% in the previous quarter and 2.0% compared to the same quarter a year ago.
Joining innovation hubs, considering alternative funding options and building courage in investors are all paths to a greater entrepreneurial network in Australia, according to business leaders.
First 25bp increase now expected mid-2019.
Australians rate restaurants, movies and travel as the most positive experiences their money can buy, according to new research from NAB.
The NAB Cashless Retail Sales Index was weaker in April, down 0.6% on a month on month basis in March.
Business conditions at record levels.
Total NAB customer spending accelerated to 5.0% y/y in Q4 2017, from 3.0% y/y in the previous quarter with spending growth up across all metropolitan and regional areas.
Insights into the mindset of Australian consumers – anxieties around future spending and savings plans, household finances, the economy, financial concerns & how these are impacting spending behaviours and levels of financial hardship.
Business conditions strong and businesses have their say on tax.
Australians remain positive about their lives today but fear the future.
Business conditions strong and businesses have their say on tax.
Based on responses from the March 2018 Quarterly Business Survey.
The NAB Cashless Retail Sales Index grew 1.2% on a month on month basis in March – slower than January or February.
Can China maintain its stable growth profile as trade tensions increase?
The NAB Rural Commodities Index gained 3.0% month on month in March, its second consecutive rise.
After a somewhat disappointing 2017 we continue to expect growth to gain more momentum during 2018 – with GDP increasing by around 3% through the year or 2.8% in year average terms.
First shots fired in the US-China trade war.
Still see growth momentum improving.
Business conditions come off the boil, but still hot.
More Aussies are opening their wallets to charity, says NAB report.
March was a month of two halves for the AUD/USD.
The NAB Residential Property Index rose 3 points to +23 in the March quarter 2018 and remains well above its long-term average (+14).
The trends reshaping health and the future implications for the Australian marketplace.
The trends reshaping health and the future implications for the Australian marketplace.
The NAB Cashless Retail Sales Index continued to improve into February, a welcome trend after the weak sales experienced at the end of 2018.
Alternative measures of labour market tightness.
Financial market volatility has eased since the US equity market correction in late January but a range of geo-political and market events could trigger another bout of uncertainty.
Sabre rattling ahead of a potential trade war?
Gradually improving profile intact, despite a weak 2017
Phil Dobbie talks to NAB’s Tapas Strickland about the market reaction to this, and to Theresa May’s announcement that 23 Russian diplomats will be sent packing in response to the Salisbury nerve agent attack.
The trends reshaping health and the future implications for the Australian marketplace.
Phil Dobbie talks to NAB’s Rodrigo Cattril about the market impact of a President following a “my way or the highway” agenda.
AUD/EUR continues to approach its two-year lows.
NAB’s positive view of GBP and forecast decline in AUD/GBP is in the immediate term.
In February the AUD/USD gave back all of its January gains and some more. February was a month characterised by an increase in market volatility, particularly in equities amid US inflationary concerns alongside a rise in US bond yields and their implicit valuation concerns for physical and risk assets.
New research challenges old adage – can money buy happiness?
Australia recorded subdued economic growth in Q4, with the detail painting a mixed picture.
The NAB Rural Commodities Index gained 1.2% month on month in February, following a drop of 1.8% in January. On a year on year basis, the index was down 2.9% in February. The gain was driven by higher grain, fruit and dairy prices, offsetting falls in beef, lamb and sugar.
The economy looks to have performed solidly in Q4, despite a large subtraction from net exports.
NAB economics changes cash rate view to one 25bp increase in late 2018.
The NAB Cashless Retail Sales Index shows improvement in January following a weak December.
Stability in financial markets over 2017 and early 2018 came to abrupt end in recent weeks, with a surge in market volatility and big falls in equity markets and prices for many commodities.
Rising demand, shrinking resources, vulnerable clients – we can’t keep ignoring the challenging business of healthcare for the elderly.
The calm in financial markets for much of 2017 and into early 2018 recently came to an abrupt end with a surge in market volatility and big falls in share prices.
Strong improvement in SME business conditions in Q4 2017, while confidence retreated a touch.
Global upturn to continue despite market turbulence.
The RBI held the benchmark Repo rate at 6% at its February meeting. This decision was in line with expectations.
Cautious optimism, but much depends on wages and the consumer.
2018 has seen a fairly mixed start to the year, with significant differences between regions and industries.
The quarterly NAB Business Survey gives a more in-depth probe into the conditions facing Australian business than the monthly survey, and also provides extra information about how firms perceive the outlook for their respective industries.
NAB’s Consumer Anxiety Index* was basically unchanged in Q4 2017 at near survey lows with job security causing Australians the least stress, consistent with a strongly improving labour market.
In seasonally adjusted terms, at -2.2%, online retail sales contracted in December, the largest since November 2014. Looking through the month to month volatility, while the trend is still positive, it has again slowed.
Sentiment towards Australian housing market positive in Q4, but confidence wanes. NAB’s view for 2018 largely unchanged, but degree of moderation ramped up.
US GDP grew solidly for the third consecutive quarter to end 2017.
The NAB Cashless Retail Sales Index shows a slowdown in December following a strong November.
China’s official data may underestimate the strength of growth in 2017.
Steve Killelea, the man behind the Global Peace Index, explains its potential value in helping make investment decisions.
The growth of the Reg S bond market has been one of the defining trends of the Asian capital markets in recent years. Driven by the seemingly unstoppable rise of Asian wealth – especially deep-pocketed Chinese investors – US dollar bond sales in the region no longer depend on the participation of US institutions.
2017 was marked by a return to stability following the volatility of recent times and the rise of innovative new products, especially in the green and social sectors.
NAB Online Retail Sales Index (NORSI) accelerated strongly in November(+4.7% mom s.a.).
2017 Surprised on the upside. Small deficit expected in 2018.
Before I went to bed last night, the working title for today’s edition was Queen’s ‘Another one Bites The Dust’.
The NAB Cashless Retail Sales Index shows strong growth in the month of November (1.6% mom).
As we go to print this morning, the US House has passed the US tax reform bill.
Nationally, dwelling values were unchanged in November 2017 according to the CoreLogic home value index.
Uneven flows – how distortions in China’s data paint a very different picture of global trade.
Aussies’ wellbeing at its highest since 2013, but high anxiety still impacting one in four
Last month’s spike in business conditions was completely unwound in the November NAB Monthly Business Survey, although the index remains at very elevated levels. Business confidence has been less volatile, but appears to be showing a modest downward trend.
2017 has proved to be another year of solid US economic growth and more of the same is expected in 2018, helped along by fiscal stimulus.
A good year for the world economy as growth rises above trend.
The year in review and the year ahead.
The Indian economy accelerated in the September quarter, recording a 6.3% yoy expansion.
Last month’s surprise spike in business conditions was more than unwound in November, although that was partly expected.
Business and government led growth
Australia’s GDP continues to grow in spite of subdued wages growth and consumer spending. Gaining a greater understanding of how these contradictory trends break down across regional and metropolitan areas, as well as consumer spending categories, is behind NAB’s expansion of its Consumer Spending and Cashless Retail analyses.
This independent report for National Australia Bank (NAB) by the Crawford School of Public Policy at The Australian National University, examines the outlook for the South Korean economy and its growing importance in the Asia Pacific region.
NAB Online Retail Sales Index (NORSI) rebounded in October(+1.5% mom s.a.) from a contraction in September (-0.5%).
Spending growth slows but “experiences” continue to out-perform.
The economy is likely to have grown at a solid clip in Q3. While some pieces of the growth puzzle are falling into place, the stark divergence between business and consumer spending remains despite jobs growth. Non-mining and infrastructure investment will be encouraging for the RBA, but higher wages growth is required.
The connection of Eastern Australia to global LNG markets has seen domestic prices face a wild year.
A shopfront to the world: how Amazon’s arrival could spell opportunity for Australian retailers.
NAB’s proprietary indicator of Australian retail sales reveals a continuation of very slow growth in recent months.
The read on business conditions was extremely strong in the October NAB Monthly Business Survey, with manufacturing posting a strong result despite the recent closure of auto manufacturing plants. The conditions index jumped to a record high, and while confidence is not quite as buoyant, it is holding above long-run average levels.
Advanced economies to drive lift to above trend global growth.
Watching the labour market and wages.
Indicators point to marginally softer conditions post China’s leadership change
Business conditions hit an all new high in October.
Explaining subdued US and Australian wages growth.
CoreLogic’s national Home Value Index held steady in October, confirming a cooling trend in housing market conditions.
There were very few consistent themes across the commodity complex this quarter.
Changing of the guard - what does China’s new leadership mean for its economy?
The NAB Rural Commodities Index rose 2.1% in October, its first monthly gain since May.
The NAB Rural Commodities Index rose 2.1% in October, its first monthly gain since May.
Online sales contract in the month, also slower over the year.
Another strong quarter of growth.
Insights into the donating behaviours of Australian consumers
SME business conditions and confidence both improved in Q3.
The Indian economy has slowed considerably since the first half of 2016.
China’s stable growth continued in Q3, but supported by another credit binge.
The NAB Quarterly Business Survey showed a continuation of the very upbeat conditions for firms into the September quarter.
Overall sentiment in commercial property markets moderated for the second straight quarter, with NAB’s Commercial Property Index down 5 points to +18 in Q3, but still well above long-term average levels (+2).
NAB’s proprietary indicator of Australian retail sales, the NAB Cashless Retail Sales Index, reveals a rebound in spending in the month of September.
Economic growth in most states is expected to strengthen somewhat in 2017-18 before moderating a little in 2018-19 as dwelling investment and LNG exports peak.
The index tracks 28 commodities weighted by the relative size of each commodity in the Australian agricultural sector.
Australian housing market sentiment lifted over the third quarter of 2017, supported mainly by a large increase in the number of property experts reporting positive rental growth in the quarter and continued house price growth in most states.
For Australia, outcomes in the September NAB Monthly Business Survey were generally upbeat. Business conditions remain rock steady at levels close to their multi-year highs, but business confidence rose only modestly after a big fall last month.
Global growth rising toward trend pace as advanced economies lift.
Repurposing an old tool – a new life for the Required Reserve Ratio.
The effects of the recent major Hurricanes affecting the US are clearly evident in some of the economic data.
Overall we are expecting that growth rates will continue to moderate across the combined capital cities.
Balancing multiple objectives, as business remains strong and consumers cautious.
Business conditions are strong, but retail is still a significant concern.
China’s old economy surprises on the downside, may point to weaker Q3 growth.
Another concern for the RBI has been the jump in core inflation (inflation excluding food and fuel).
Tightening the purse strings – China’s foreign investment is slowing in a more closely regulated environment.
All eyes on China’s steel sector.
Online sales accelerated over the year and month.
Insights into the mindset of Australian consumers – their anxieties around future spending and savings plans, what drives these concerns and how they are impacting actual spending behaviours and financial hardship.
Consumers spending their disposable dollars on experiences
For the first time since their introduction in 1999, Farm Management Deposits have topped $6 billion. Khan Horne, General Manager of NAB Agribusiness, explains which sectors and states have fuelled this incredible growth, and what the result means for the Australian agricultural sector. Khan Horne, General Manager, NAB Agribusiness
NAB’s proprietary indicator of Australian retail sales, the NAB Cashless Retail Sales Index, reveals a sharp decline in spending in the month of August.
Australia’s next phase of growth must be defined by ideas, creativity and execution. Our future lies in our ability to foster a culture of innovation. But how do we measure innovation across all sizes and types of business?
In Australia, the August NAB Monthly Business Survey showed some mixed results, but is still encouraging overall.
Global growth lifts in mid-2017, heading back towards trend rate as pace of advanced economy output expansion picks up.
RBA to remove some emergency accommodation in 2018.
Seasonal conditions remain a major consideration.
Increasing household wealth (due to rising equity and house prices), as well as a high level of consumer confidence, remain tailwinds for consumer spending.
The Indian economy decelerated in the June quarter, growing by 5.7% yoy, the lowest since March 2014.
Waiting to see if goals on tax and trade can make up for failure on health reform
Q2 GDP data will be released on Wednesday 6 September at 11:30am AEST. Additional partials will be available tomorrow and may alter our forecast.
After a sluggish start to the year, GDP growth rebounded in the June quarter and the labour market continues to tighten.
Chinese data generally weaker in July, returning to trend after strong June
Unwinding road ahead – weaker Chinese producer prices providing headwinds for advanced economy inflation
The NAB Cashless Retail Sales Index is a new product which provides timely proprietary data on a major part of retail spending in Australia.
The July NAB Monthly Business Survey showed a continuation of the strong run enjoyed by the business sector. Business conditions rose to their highest level since early 2008, while confidence also strengthened.
Global growth heading back toward trend after soft first quarter.
No imminent return to “neutral”
Conditions continue their strong run, bolstering business confidence.
Online sales still growing, albeit slower over the month and year.
SME business conditions eased in Q2 while leading indicators remained mixed.
NAB Group Chief Economist Alan Oster says that commercial property sentiment continues to vary widely by sector.
The NAB Cashless Retail Sales Index is a new product which provides timely proprietary data on a major part of retail spending in Australia.
Steady as she goes – economic growth and other key indicators stable in Q2.
Revisions to real GDP growth forecasts this month largely reflect a stronger than expected rebound in coal exports following disruptions from Cyclone Debbie in Q1. Further out, we have not fundamentally changed the tone of our outlook.
Following a slow start to the year, GDP growth looks to have accelerated in the June quarter.
Gold began 2017 strongly, up 8% in the first half - despite falling 2% in June. This weakness has continued into early July, with the strong US payrolls data exerting further weakness on gold. However, gold received some support following Fed Chair Janet Yellen’s semi-annual testimony, which the markets interpreted as somewhat dovish.
Global upturn remains in place despite the risks.
Australian housing market sentiment (measured by NAB’s Residential Property Index) fell noticeably in the June quarter after climbing to a 3-year high in March.
Encouraging signs emerging, but long-term headwinds keep RBA on the sideline.
Business conditions hit another multi-year high, with most industries performing well. Stronger trading conditions (sales) and profitability drove the improvement, while employment conditions were steady.
Get the latest monthly update on housing market conditions around Australia.
Australians reported a further improvement in the quality of their lives in the March quarter.
In May, international ratings agency Moody’s announced a downgrade for China’s sovereign credit rating, citing the country’s rising debt as a key factor in this decision.
The NAB Rural Commodities Index is an index of 28 agricultural commodities weighted by the relative size of each commodity in the Australian agricultural sector.
The autumn break this year was rather mixed, with some areas receiving good rain and others missing out.
Online sales growing over the year, rebound in the month
Inflation has slowed recently even allowing for ‘one-offs’.
Customer satisfaction, becoming a viable business and surviving tough economic conditions are the top three moments that matter for Australian SMEs, according to a new report released by NAB. And while almost half of SMEs are set to expand, they’re feeling some pressure.
The NAB Monthly Business Survey was a little softer in May, but still points to a healthy business sector. Business conditions are elevated and confidence is holding up above long-run average levels.
Get the latest monthly update on housing market conditions around Australia.
Indian economic growth decelerated in the March 2017 quarter, with real GDP expanding by 6.1% in yoy terms.
Global upturn remains in place although momentum stalled in early 2017
Financial anxiety eases but 4 in 10 consumers still experienced some form of financial hardship in the last 3 months. Financial anxiety continues to be a bigger issue for young people (particularly women) and low income earners.
Trends stable across the board, no sign of a major economic slowdown.
Business versus households – how will the situation resolve itself?
Australian economy ekes out modest growth in Q1
Business conditions remain elevated, but confidence pulled-back from multi-year highs.
Production growth to decline or slow in 2017 and 2018.
After a slow start to the year, early indications for June quarter GDP are pointing to an acceleration in growth.
This is the second month of NAB’s new regional price indicators, in effect a separate NAB Rural Commodities Index for every region in Australia.
Sheryl Crow’s hit ”strong enough” finds Crow frustrated in a relationship and asking the question, "Are you strong enough to be my man?". ell Friday night was all about the US jobs report and no doubt a similar question (without the man bit of course) crossed investors’ mind.
New data released by NAB today shows that spending on consumption-based goods and services by NAB customers slowed to 2.0% over the year to Q1 2017, from 3.1% over the year to Q4 2016.
Online sales slower over the year, contract in the month
OPEC deal was extended a further nine months despite low prices.
The peak in the housing construction boom is approaching. 'Oversupply' of apartments warrants close monitoring, although various industry constraints will provide an offset.
Belt and Road Initiative – can the reality of the program meet China’s grand ambitions?
NAB’s Consumer Anxiety Index - which measures concerns about future spending and savings arising from job security, health, retirement, cost of living and government polices - fell to a survey low 55.9 points in Q1 2017 (58.7 in Q4 2016).
A slow start to the year…again.
Now in its 6th year, the index highlights trends in giving and helps inform charities’ fundraising strategies.
Get the latest monthly update on housing market conditions around Australia.
Key indicators a little softer in April, pointing to easing economic growth in Q2.
More for business customers and regional areas, but will the promise of red tape being cut ever be realised? Budget 2017 insight.
The NAB Monthly Business Survey posted another strong result in April, with both business conditions and confidence improving – pointing to ongoing strength in business activity in the near-term.
Economy regained its footing over 2016 GDP. It grew in each quarter in 2016… the first year this has occurred in since 2005.
This month NAB Economics introduces new regional price indicators, in effect a separate NAB Rural Commodities Index for every region in Australia.
No FTA yet, but deepening trade prospects.
The details for quarterly growth, while mixed, where not as bad as the headline result.
Conditions were again strong in essential services including health, property, finance, transport and business services.
Sentiment in commercial property markets continues to vary widely across states.
Short term spike in coking coal masks softer trend for bulks.
Australians remain highly anxious. While having more money might solve some of our concerns, it would do little to solve some of the biggest detractors of wellbeing. But, it could help close the “wellbeing gap” between high and low income earners.
China’s income inequality improving but still some long term challenges.
The NAB Quarterly Business Survey generally paints an encouraging picture of both current business activity and the outlook.
An improving US-China relationship provides a better environment for China’s economy.
In March, the NAB Monthly Business Survey results pointed to an overall healthy economy that is gaining momentum, at least in the near-term.
Geo-political risks fail to dent global reflation...for now.
Modest growth as far as the eye can see.
Results from the March NAB Monthly Business Survey point to an overall healthy economy that is gaining momentum, at least in the near-term.
Prime Minister Turnbull visits India after important economic reforms.
Investment indicators looking better
With house prices rising, vacancy rates declining and a previous drop in building approvals, it’s likely that residential construction activity should begin to strengthen.
Rise of the machines: could automation help sustain China’s long term growth momentum.
R.I.P. Chuck Berry. And R.I.P. anti-protectionism, after the weekend G20 meeting communique omitted reference to avoiding protectionism, reflecting the new reality of the USA’s position
More Chinese tourists are starting to prefer free independent travel over group tours, according to data from Tourism Australia.
Jobs growth, business surveys and consumer sentiment all point to an economy in good shape.
In February, the NAB Monthly Business Survey moderated from the surprising strength seen in January, but remained consistent with a relatively robust view of business activity and investment behaviour in the near-term.
Financial stability considerations to keep RBA at bay
Get the latest monthly update on housing market conditions around Australia.
An encouraging start to 2017 – although strength still comes from the old economy, with retail trends disappointing.
Foreign multinationals suggest quite good expectations for capital investment in the next 12 months
Business survey suggests solid near-term activity, despite easing from multi-year high.
Prices have seen a gradual recovery from the mid-2014 to early 2016 price slide.
Financial markets rallied strongly shortly after it was clear Donald Trump would be the next President. This was evident across stock, currency and bond markets, and there was also a decline in credit spreads.
Growth will remain solid across the large south-eastern states, while there are signs of stabilisation in mining states as the end of the downswing in resource-related investment approaches.
Change to fed rate call - March hike now expected.
Likely outcome is that the Euro-zone survives.
New data released by NAB today indicates that spending on consumption-based goods and services by NAB customers grew 3.1% over the year to Q4 2016.
Q4 GDP data will be released on Wednesday 1 March at 11:30 AEDT. Additional partials will be available next week prior to the GDP release.
Australians and businesses overwhelmingly think our country is a great place to live and have a business. However, Australian consumers and businesses are anxious about what the future holds.
Commercial property market sentiment has continued to build on the positive gains seen in our last survey. NAB’s Commercial Property Index rose 5 points to +21 in Q4 - its highest level since the Survey began in early-2010.
Business surveys and measures tracking the volume of activity suggest that the global economic upturn lifted a notch toward the end of last year and that trend seems to have continued into early 2017.
Low-tier SMEs’ business conditions now comparable to that of their mid-tier and high-tier counterparts
NAB Economics changes cash rate view to one 25bp cut in late 2017.
Stronger near-term momentum will keep RBA on hold, but 2018 still a worry.
Get the latest monthly update on housing market conditions around Australia.
The RBI, somewhat surprisingly, maintained the policy repo rate at 6.25%. Uncertainty about the effects of demonetisation and sticky core inflation were factors.
The strength witnessed in last month’s NAB Monthly Business Survey continued into January, with both business conditions and confidence jumping to much higher levels.
The Australian budget in the first six months of this financial year is tracking a little higher, but not significantly worse than recent budget forecasts
The US economy continues along the same moderate growth path it has experienced in its recovery from the Global Financial Crisis.
From a political perspective, President Trump’s decision to withdraw from the TPP reflected US sentiment against globalisation, particularly in the mid-west rust belt.
Business confidence was down slightly, but has been remarkably steady for a long period given the context of global and political uncertainty.
Fed pressure index signalling upside risks for US inflation and interest rates?
In total, we estimate the Australian online retail market was worth $21.65bn in the 12 months to December 2016.
While we are receiving many questions about the impact of President Trump’s policies on the outlook for the US and global economies and markets, the most frequent question we are being asked about Australia is “why is NAB forecasting two interest rate cuts in 2017” (in May and August)?
We expect growth to face some headwinds in coming quarters but to strengthen later in the year and into the next, assuming the President delivers a fiscal stimulus to the economy
By state, confidence has improved in VIC and QLD relative to the last survey, but this was offset by much weaker confidence in SA/NT and a small fall in NSW
China records a comparatively strong finish to 2016, but Trump trade uncertainty adds downside risk to our moderate easing forecast for 2017.
Re-building the US industrial base, aiming to “massively increase jobs, wages, incomes and opportunities for the people of our country” is the principal economic objective of the Trump Presidency.
Against flatter job advertisements of late, job vacancies have been trending higher. Higher job vacancies are usually associated with a lower unemployment rate and greater employment growth
According to the most recent surveys, business conditions and household sentiment are solid, and on an upwards trend.
We estimate that Australian consumers have spent around $21.4 billion over the last 12 months to November 2016
Australia’s population growth remains strong by historical and international standards at around 1.4% y/y. That is 338,000 persons in the past year – nearly equivalent to the population of Canberra being added to Australia each year.
We are becoming increasingly concerned about the underlying momentum in the economy as evidence mounts that the non-mining economy is losing steam.
China is similarly an important market for US producers, being the country’s third largest export market in 2015
Global economic growth remains moderate with a sub-trend pace of GDP expansion set to continue.
No technical recession, but outlook for domestic demand uninspiring
Monthly business survey readings provide the most up to date measure of the pulse of global economic growth, they have been improving in the months leading up to November.
The Australian cattle industry has enjoyed a stellar two year run of rising prices, and more recently, very good rains across many cattle producing regions.
Get the latest monthly update on housing market conditions around Australia.
China’s trade surplus narrowed in November, as a strong month-on-month rebound in imports narrowed the gap.
After a strong third quarter, the US economy remains on a solid footing based on the most recent partial indicators.
NAB economists continue to monitor recent disappointing momentum in indicators of the NSW economy, employment and – until Friday – also in retail sales.
The trade minister said it was a good time for Chinese businesses to take advantage of low prices in the resources sector to position themselves for the upswing in resources, oil and gas.
The income measure of GDP is likely to be mixed, but stronger than the expenditure measure
Family, our homes and personal safety contribute the most to our feeling of Wellbeing.
Fundamentally the trend slowing in online retail growth continued in October
Our feature article in this Weekly delves into the recent slowdown in employment, which if it continued into 2017 could be the catalyst for further RBA easing.
While the 24-hour news cycle may talk down Australia’s transition from a commodity to service economy, the figures tell a different, and very positive, story.
The new President and administration will take office at a time when the economy is in reasonably solid condition at the macro level.
Monthly business survey readings provide the most up to date measure of the pulse of global economic growth – and they have been improving in the months leading up to October.
The impact of the win in the U.S. Presidential election by Mr Trump is at this stage highly uncertain
Despite a slight moderation in NAB’s Business Survey conditions in the September quarter, NAB’s commercial property index rose 11 points to +16, with sentiment higher in all sectors.
US election highlights social and economic tensions
The global aluminium market continues to be driven by Chinese producers, which plan to add significant new capacity at lower costs.
In the 12 months to September, Australians spent an estimated $20.8 billion on online retail – a level that is equivalent to around 7% of the traditional bricks and mortar retail sector.
Innovation in independent schools led by doing things differently and cost efficiently.
Economic stress provides the backdrop to an acrimonious campaign.
US GDP growth accelerated in the September quarter to its fastest pace in two years.
Global dairy markets have faced very difficult conditions since plummeting in the first half of 2014
The progress of the season, which has been generally much wetter than average in eastern Australia but dryer in the west, continues to be the major consideration for Australian agriculture.
The NAB SME Survey is the leading business survey of small businesses in Australia, and complements the comprehensive Quarterly NAB Business Survey.
China faces some interesting healthcare challenges over the next few decades – and Australian companies are well placed to be part of the solution.
As Australia’s population ages and ‘baby boomer’ retirements head toward their zenith in 2025, a discussion on the Retirement Risk Zone, that is the 10 years leading to retirement, is timely.
The quarterly iteration of the NAB Business Survey provides additional valuable insight into Australian business than the regular NAB Monthly Business Survey. This publication offers a more in-depth probe into the conditions facing Australian business.
The rate of charitable giving in Australia fell in the 12 months to August 2016, following a spike in the previous year, coinciding with the Nepalese Earthquake, and a still cautious consumer, according to new research released by NAB today.
The NAB Health Practitioners’ Sentiment survey is designed to gauge how medical practitioners feel about the prospects for their business and industry.
In this weekly, we look at a number of indicators that are increasingly suggesting we are broadly at the bottom of the mining cycle.
The bigger picture – A Global and Australian economic perspective.
The outlook for the labour market is key. While we continue to expect the unemployment rate to remain in its recent range between 5½% and 5¾%, the recent softening in trend employment growth bears close watching.
Global economic growth remains soft with a sub-trend pace of expansion set to continue and few signs of an upturn.
The RBI cut the policy rate by 25bp to 6.25% at the October meeting.
This insights paper has been prepared by NAB Corporate Health and JBWere to address the current challenges facing providers and to examine some of the successful strategies being adopted.
The more favourable USD has been a source of support for most commodity markets in the first half of 2016, but heightened uncertainty has seen additional volatility across financial markets, including commodity markets, more recently.
We estimate that Australian consumers have spent around $20.6 billion over the last 12 months to August 2016.
Spring has brought not only considerable rain to parts of the country but also a further uptick in the NAB Rural Commodities Index.
Four hours before an estimate 100 million Americans tune in to watch the two wannabe leaders of the free world go head to head, and a Bloomberg poll published around 7pm Australian Eastern Time last night shows Clinton and Trump tied on 46%.
Attached to this week’s publication is a detailed slide pack covering the latest trends in Australia’s population.
Warning signs for China’s financial sector don’t guarantee crisis
August saw another rise in global equity prices despite increased talk from US Federal Reserve officials that suggest they are looking to raise US interest rates in either September or December.
It’s now a sea of green in the US equity markets in reaction to the Fed leaving rates on hold this morning, leaving the Fed funds rate at 0.25-0.50%, as nearly universally expected.
A rather measured night again in the lead up to the FOMC tomorrow morning and the BoJ meeting today where the Bank has been honing its thinking on policy to lift inflation.
Markets have been tapping their fingers overnight in the lead up to the Fed meeting. Currencies have traded in very contained ranges, the USD only somewhat softer again with the US Treasury curve up 1-2 basis points for the session.
August U.S. CPI data turned out to be the driver of much of Friday night’s market price action. The 0.3% rise in the core CPI series pushed annual growth up to 2.3% from 2.2% - matching its post-recession cycle high and versus the 2.2% expected.
In this video, Group Chief Economist, Alan Oster discusses insights about what are businesses telling us about current conditions.
The bigger picture – A Global and Australian economic perspective
The rust belt region has continued to underperform in recent times – as service focussed provinces have driven a greater share of China’s growth. In 2015, the three rust belt provinces were among the four weakest growing regions.
During the US dollar’s recent revival associated with deteriorating global risk sentiment and steepening yield curves, the commodity currencies – in particular the AUD and NZD – have been the hardest hit.
Mental preparations for another onslaught of selling bonds and equities offshore were put on the backburner with markets becalmed overnight.
Global growth still not lifting off.
Yesterday Brainard's comments appeased fears of an imminent hike in September, but concerns of a rising belief within the Fed that the benefit of keeping monetary policy accommodative is waning appears have left markets uneasy
Get the latest monthly update on housing market conditions around Australia.
The results from this month’s survey remain broadly consistent with our prior view of the economy and the near-term outlook. It points to a patchy, but sustained, improvement in the non-mining economy, with the major services sectors and construction leading the way.
Three main developments overnight, a spike in oil prices, a somewhat more content ECB President, and a renewed AUD warning from RBA Governor Stevens in an AFR interview, the AUD in the wake of the interview pulling back from over 0.77 to 0.7642 this morning.
Gold prices have been relatively resilient in the past couple of months, fluctuating between $1300/oz and $1370/oz since late June
Australia’s wellbeing has fallen across all measures - life satisfaction, life worth, happiness and anxiety.
It has been a relatively quiet night for markets with the moves in GBP probably the major highlight. BoE Governor Carney faced the Treasury Select Committee in parliament and was quick to give himself a nice pat on the back for the bounce in business and consumer surveys in August.
Expenditure components show a lift in domestic demand, supported by public spend.
The recent ramp up in Fed rhetoric aimed at putting the market on the scent of an imminent Fed funds rate hike took another blow last night following a sharp drop in the August ISM non-manufacturing index.
In offshore markets depleted by the absence of the United States off for Labor Day, latest UK economic data and gyrations in the oil price captured most of the overnight headlines.
This week, we thought we would focus on three themes: (i) Friday night’s US labour market data; (ii) this week’s upcoming Australian Q2 GDP data; and (iii) some thoughts on apartment settlements.
Despite inflation remaining stubbornly below the Fed’s 2% goal, lower unemployment can still be expected to generate price pressures.
The August US employment report turned out to be something of a Goldilocks affair.
Q2 GDP growth expected to ease to 0.3% in the quarter (down from 1.1%)
Jump (for my love) was a classic 1980s hit by the Pointer Sisters and one suspects would be particularly high in the Spotify lists of several Fed officials after last night’s weaker than expected Manufacturing ISM.
One of the first things that I learned when I arrived in Australia a few years ago is that spring in southern hemisphere countries doesn’t start on the same day.
The Australian lamb industry has enjoyed broadly favourable conditions of late, and we remain upbeat in our assessment of the industry.
The trading partnership between Australia and New Zealand is a strong one. With the earliest trade agreement between the two countries dating back to 1922,
Online sales down by 0.36% in July 2016
As we went home yesterday evening, there was pretty keen anticipation of a forthcoming Bloomberg TV interview with Fed vice-chair Stanley Fischer.
Apparently this 1989 hit by the Rolling Stones was written by Mick Jagger as a response to Keith Richards solo effort “You don’t move me”.
The major development for markets last week was confirmation that the US Federal Reserve is looking to hike interest rates this year.
Janet Yellen’s Friday morning appearance at Jackson Hole proved not to be the damp squib that many were expecting.
In a night of still very contained major FX crosses, Fed commentary has started to kick in from Jackson Hole.
The “X factors” that had been dominating negative market views – bad debts in the Italian and Chinese banking system, terrorism, political issues and the rise of anti-globalisation – have given way to a “fear of missing out” rally.
We review July conditions and recommend overweight exposure in cash and alternative assets, with underweight positions in fixed interest, property and Australian equities, while keeping neutral exposure to international equities.
Only on line one and I already feel like I’m making this up, such is the state of market torpor in front of the Fed’s Jackson Hole symposium and as Sothern England basks in 30 degree summer sunshine – and uncharacteristically not for the first time this year.
It’s been a rather uneventful night for most of the major currencies, with the possible exception of Sterling.
The rise in the USD and short dated UST yields on the back of Fed vice-chair Fisher's comments over the weekend have been partly unwound in the overnight session.
The Australian dollar has opened this week close to 0.76 US cents, having lost some ground last week amid warnings from several key Fed speakers that the market is under-pricing the chances of a Fed rate hike this year
China’s slowdown has hit export dependent East Asia
Friday looks to have shown FX traders to be the smartest guys in the room. Traditionally referred to as the ‘last market to clear’ (and so giving FX analysts such as this scribe a career) the dollar had put on a strong showing during the APAC session.
Short sterling positions were dealt another blow overnight by a blockbuster rise in UK retail sales in July where the weather and the low currency has seen a very good month for the High Street.
The overnight session was all about the July Fed Minutes.
It was an overnight session marked by two Fed speakers banging the drum (not as strongly as Keith Moon used to) warning that even the September 22 FOMC is not off the radar for a Fed rate increase.
NAB, in conjunction with CoreLogic (RP Data), brings you the Australian Housing Market Update for August 2016.
The RBI held the policy (Repo) rate at 6.5%, as expected. NAB Economics is forecasting a 25bp cut in rates to 6.25% in the December quarter, on expectation of softer food prices.
Europe had a quiet day with many continental countries observing Assumption day. The Stoxx 600 index ended the day flat and the FTSE100 climbed 0.36% aided by another move lower in Sterling.
GDP growth was soft in the June quarter although the underlying pace of economic activity appears stronger.
The Housing Market Report is your guide to the current home value trends in Australia. You’ll find information about what’s happened over the last 12 months, as well as NAB’s expectations of where prices are headed in the near future.
The previous Friday’s strong US payrolls report has become a somewhat hazy memory after a much softer than expected retail sales report on Friday that challenged prevailing confidence that the US consumer has entered Q3 in rude health.
A rebound in real estate investment, new construction activity and industrial demand for related products – such as steel and cement – helped to underpin economic growth in the first half of 2016.
Through our research on wellbeing Australians have told us that they believe it is important for them to feel “connected” with their local community. But how connected do they really feel and what would they change within their communities to improve their sense of personal wellbeing?
Big cuts in corporate and individual taxation are key to Mr Trump’s election platform, aiming to boost the business sector and deliver increased spending power across the income spectrum.
Sentiment in the retail commercial property market has risen to its highest level in over six years. However, strong retail market confidence was not enough to offset the lower sentiment recorded across the office, industrial and CBD hotels sectors. Overall, the NAB Commercial Property Index fell 7 points to +5 in the second quarter of this year.
In delivering only 25bps cut to the OCR and which was more than 100% discounted ahead of time and the RBNZ’s latest 90-day bill track only implying one more cut, the NZD has predictably bounced sharply. It up just over 1% as we go to press.
Global financial markets have digested the latest shock – the UK’s “Brexit” vote – quite well. In Australia, business sentiment has shown great resilience to external shocks in the July NAB Monthly Business Survey
The overnight session was neither strongly risk-on nor risk-off; the AUD has been testing higher levels overnight with the big dollar sold lower during the US session.
At its August meeting, the RBA cut the cash rate by 25bps to 1.5% (against our expectations) following a similarly-sized 25bp cut in May. Major banks have since passed on some, but not all, of the easing through to lending rates.
Brexit has had less impact on the global economy than many feared.
Business sentiment has shown great resilience to external shocks in the July NAB Monthly Business Survey, with firms choosing to remain focussed on the positive trends within their own business.
Breathe was Prodigy’s bestselling album in the UK despite the fact that radio play was restricted to the evening shows and although it would be hard to make any link with the song lyrics and market events.
Last week’s RBA rate cut has strengthened the argument that the RBA is uneasy about the outlook for Australian inflation.
There wasn’t much not to like about Friday’s July US payrolls report, the 255k rise in headline payrolls enhanced by 18k worth of upward revision to May and June and meaning that well over half a million more Americans are in work compared to just two months ago.
It was pretty much all about the Bank of England overnight ahead of payrolls tonight. As my colleague from London Nick Parsons reminded us, there was the real potential for the BoE to over-promise and under-deliver, net GBP shorts according to IMM data at the greatest level of this series.
Dido’s chorus to Eminem’s brilliant ‘Stan’ sums up last night’s US data and which was just about the only talking point in offshore markets last night.
National Australia Bank’s latest Online Retail Sales Index (NORSI) shows online spending grew by 13.5% in the 12 months to June 2016. While still strong, growth has flattened from the year-on-year growth seen back in 2011 when the index was first established.
It was a toss-up this morning between the Rolling Stones classic and “You Can’t Hold a Good Man Down” by James and Bobby Purify (et al), both in reference (or deference) to the performance of the Aussie dollar in the aftermath of yesterday’s RBA rate cut.
The market has continued to price toward the likelihood that the RBA will cut rates again at tomorrow’s Board meeting, pricing in this morning a 64% chance of an easing, with 36 of 47 economists surveyed by Reuters on Friday forecasting a cut this week.
In the June quarter 2016, US GDP grew by an annualised 1.2% qoq. This was a little stronger than the 0.8% qoq growth recorded in the March quarter, but still a relatively soft rate of growth and below expectations.
Released overnight, the US ISM Manufacturing release for July was barely a miss, coming in at 52.6 against consensus of 53.0.
NAB’s Rural Commodities Index includes 28 commodities. The index is weighted annually according to the gross value of production of each industry in Australia.
Weaker than expected US economic growth for the June quarter after an underwhelming outcome from the Bank of Japan on Friday set the tone for markets on Friday and at the open today.
It was a difficult month for equities with an initial sell off in early June, following the release of weak jobs growth figures in the United States and another decline later in the month following the UK’s decision to leave the European Union.
Australia’s next phase of growth must be defined by ideas, creativity and execution. By people and businesses that are adaptive, agile, thought leaders and doers.
Gimme Gimme Gimme was ABBA’s most successful hit in Japan, reaching No.17 on the billboard charts in 1979. It might be time to dust that record off today ahead of the Bank of Japan meeting decision at around 12.45pm AEST.
The NAB SME Survey revealed very strong results across a wide range of indicators in Q2, suggesting that the non-mining recovery is broadening to include smaller businesses.
The revelation that the underlying CPI was not another repeat of the first quarter when growth was an anaemic 0.2% but pushed up this quarter to 0.5% had the market rethinking and repricing whether the RBA was indeed more likely than not to cut rates again next week.
Limbo Rock is the less famous (and in your scribe’s opinion underrated) hit song by Chubby Checker. No surprises for its inclusion today, with Aussie CPI out at 11.30am and key to the RBA August Board meeting next week.
In this report we present a strong outlook for Australian pulses production, reflecting the exceedingly favourable season so far and greater plantings for some varieties.
Mr Trump’s economic platform is radical in many respects, calling for big tax cuts, alongside continued support for health and welfare spending.
After seven years without a hit, Elvis Presley reclaimed his title of “The King” following the release of Suspicious Minds.
Over the past few years, the rate of increase of Australian house prices has at times been of concern to the RBA.
US equities indices edged a little bit higher on Friday despite mixed corporate earnings while European equities ended the day practically unchanged despite the fact that European Flash PMIs for July were better than expected.
This is the sixth in a series of reports prepared by the Australian Centre for Financial Studies for National Australia Bank aimed at explaining the potential role of corporate bonds in retail investor portfolios and promoting growth of the corporate bond market.
The ECB’s policy meeting has come and gone without any policy action, though none was expected. At 1.1025, the EUR sits where it was late yesterday in the wake of some intra-session ECB meeting volatility.
The NAB Quarterly Business Survey provides valuable insight into Australian business, and offers a more in-depth probe into the conditions facing Australian business than the monthly survey, and also provides extra information about how firms perceive the outlook for their respective industries.
Solid growth across the large south-eastern states has become increasingly entrenched over the past year, while difficult conditions in the mining sector are having a more pervasive impact across Western Australia, the Northern Territory and parts of Queensland.
As we are about to press the send button, the RBNZ has just released it economic update and although a dovish tone was expected, the NZD has dropped 25/30pips to around 0.6988.
This NAB special report provides a unique insight into Australia’s start up culture. It explores the latent desire of many budding entrepreneurs (both younger and older) to start their own business.
Yesterday’s RBA Minutes with its dovish take and concerns about the activity side of the economy saw the local rates market move to price in a higher above-50% probability of an August RBA move (from 59% to 63%).
In a quiet session US and UK equity indices edged a little bit higher buoyed by technology and financial shares while European indices drifted lower weighted down by energy shares following a sharp drop in oil prices.
Last week’s local data provided further indication that the recovery in the non-mining sectors has continued through the June quarter.
Primarily driven by very strong consumption growth, activity looks to have picked up in the June quarter, after a sluggish start to the year.
News of the (now failed) attempted military coup attempt in Turkey started filtering though about half an hour before the US stock market close, too late to have much impact on cash indices which closed fairly flat but early enough to see the S&P500 futures lose 0.4% after the NYSE close
Despite decades of change, China’s State-Owned Enterprises (SOEs) are a specific segment of the economy that still requires substantial reform.
Housing sentiment softens but still positive. Victoria and Queensland expected to provide the best capital returns in the next 1-2 years as prices continue falling in WA. Overall demand from foreign buyers continues to shrink as buyers retreat from Queensland and re-focus towards Victoria.
It’s been a busy night in the UK, with PM Theresa May appointing her full new Ministry and of course the Bank of England meeting.
In 1968 John Lennon wrote this Beatles song after three weeks of meditation with Indian Gurus, equity markets have been on a tear for four days and now in a similar way they are also showing signs of fatigue.
The Brexit decision has provided yet another shock to global financial markets.
Risk assets had another positive night boosted by the prospects of a new round of stimulus in some major economies and the removal of at least one source of UK political uncertainty.
In our latest global forecast update we revised down our United Kingdom (UK) year-average GDP growth forecasts in the wake of the UK vote to leave the European Union (EU) – so called Brexit.
SA economy making progress; NAB survey, Employment and BoE this week
Brexit, the latest in a series of shocks to global financial markets, leads up to shave our global growth forecasts by 10 to 20 bps in 2016 and 2017.
The overall narrative of the Survey has not changed this month, even in light of recent disruptions to financial market sentiment.
Anna Leadsom has stood down as a candidate for leadership of the UK Conservative Party, paving the way for Home Secretary Theresa May to be the next Prime Minister, expected to be formally installed Wednesday after PM Cameron’s resignation.
he US non-farm payrolls headline rise of 287k comfortably exceeded expectations (180k) but wasn’t backed up by the subsidiary details in the report with the unemployment rate higher, small net downward revision to the prior two months payrolls and hourly earnings up just 0.1%.
Uncertainty around the outlook for commodity prices has ramped up further in the wake of the recent Brexit decision.
It was an eventful news day for the AUD yesterday, even if the currency was little changed, and is not breaking new ground this morning, S&P yesterday changing the outlook on Australia’s AAA rating from stable to negative.
Consumer anxiety has now fallen for each quarter over the past year, as Australians respond to sustained improvements in the labour market and recovery in the non-mining economy.
Genesis’ 1973 album laments the loss of English folk culture and increasing American influence. 43 years on, England can now have back as much of the former as it cares for, but has to hope it can look forward to even more of the latter.
Core global yields have made new record lows amid an increase in risk aversion following news that a number of UK asset managers led by Standard Life were suspending redemptions on their property funds.
The USD weakened overnight, in a night of focus on Europe with the US out for its Independence Day holiday.
The early part of last week saw a continuation of post-Brexit equity market weakness, falling bond yields and generally heightened uncertainty.
Online sales increase 2.0% in May 2016
The outcome from this weekend’s Australian election remains too close to call. This uncertainty and lack of a clear majority has had a mild negative influence on the AUD/USD at the open.
As a BBC commentator described it this morning, providing it doesn’t violate the laws of thermodynamics, anything can happen inside the British Conservative Party.
Our expectations for prices in the coming year are underpinned by our forecasts for a generally lower AUD, tracking in the high 60s range in late 2016 and 2017.
Lots of soul searching not doubt from EU leaders on day two of their summit with UK PM Cameron back home.
The personal ties remain strong between Australia and the UK. Around 1.2 million people living in Australia in 2015 were born in the UK, one in 20 of the population.
With the Brexit vote we expect markets to push lower over coming weeks until investors feel appropriately compensated for these heightened risks. We see post Global Financial Crisis share market sell-offs as a useful guide for what is likely over coming weeks.
Whether it’s a near to end-quarter rebalancing or just some short-term perceived value after the knee-jerk post-Brexit sell off, risk appetite had something of a positive session overnight with equities and top-tier bond yields higher.
Brexit is a significant shift in the geopolitical landscape, with associated uncertainty. Investors will need compensation for this with lower share prices. We believe a 15% global equity sell-off over the next 6-8 weeks is a reasonable base case.
Equity markets on both sides of the Atlantic ended the day sharply lower, the British Pound fell another 3.6% and demand for safe haven assets boosted gold and dragged core global yields lower.
It’s now nearly 72 hours since British voters voted to exit the European Union and we examine the aftermath of this decision.
Founded in 1928, the Royal Flying Doctor Service is a not for profit with an annual revenue of $300 million operating 68 aircraft, from 24 bases across the country. Keeping the planes flying necessitates fundraising of $50 million annually.
Lows for the day on Friday in all things GBP and AUD and highs for the USD and US Treasury prices came early to mid-afternoon Australian time almost as soon as it became clear the UK had voted for Brexit.
Despite stormy weather in London and the south east, turnout has been reported to be high and although markets appear to have ‘Remain ‘ as the most likely outcome, recent history suggests that voting outcomes don’t always end as expected.
Alan Oster discusses the influence of the sharing economy and explores how fast it is growing and its impact on the business community.
Pink Floyd’s 1979 song featured on The Wall tells the story of a couple who have treated each other very badly yet are devastated at the prospect of their relationship ending. This seems somewhat appropriate with us now just 9 hours away from polling getting underway in the UK EU referendum.
Ahead of Thursday’s UK referendum, Yellen’s testimony to the Senate banking committee was the second big event of the week. Unsurprisingly, however, we got a similar message to the one we got from last week’s FOMC.
An International Treaty is helping Australian farmers to boost productivity, adapt to climate change and stay competitive. Chief Plant Protection Officer Dr Kim Ritman discusses the treaty and its importance.
The risk-on mood that developed as Asia markets opened yesterday on the back of the weekend poll from the Sunday Mirror pointing to a swing back to the remain vote gathered more force overnight, especially in European markets.
China’s longer term growth prospects are dependent on a range of economic reforms – critical to supporting the broad based productivity growth necessary to offset the negative demographic effects from the country’s declining working aged population.
Brexit and local farm conditions too Thursday’s UK EU Referendum will occupy market attention this week. A poll being conducted by ComRes for the UK Sunday Mirror at the time news of the assassination of British MP Jo Cox hit the wires revealed a switch in voting favouring the remain vote. The percentage of those […]
Markets being what they are, last Thursday’s tragic news of the slaying of UK MP Jo Cox, campaigning on behalf of the ‘remain’ side in front of Thursday’s EU referendum, elicited a strong positive response in all things Sterling, as well as supporting risk sentiment more broadly.
Yesterday’s fall in the Nikkei and strengthening of the Yen on the back of BoJ inaction and heightened concerns around the outcome of the UK EU referendum set the tone to the early part of the overnight session.
The US Fed kept its policy rate unchanged (between 0.25% and 0.50%) as expected, however the tone of the statement and forecast revealed a more dovish stance.
Equity markets have recovered much of the losses from earlier in the year but remain below last year’s peaks.
As US markets close and Asia opens this morning, further damage to sentiment has been relatively limited.
This month’s NAB Business Survey remains true to theme of ongoing recovery in the non-mining economy, building on the already solid growth seen in the recent National Accounts.
While global financial markets slumped and then recovered in the early months of the year, global growth has continued to remain disappointing and sub-trend.
China’s construction rebound underpins industrial activity but also presents uncertainty going forward.
Friday night, Sterling was hit hard soon after London had shut shop for the week, on the publication of an (internet) poll by ORB of over 2000 respondents for the UK Independent newspaper, showing a 55/45 split in favour of ‘Leave’.
The winding down of the mining investment boom has largely unfolded as many had predicted.
The term ‘Helicopter Money’ comes from a thought experiment by Milton Friedman in which helicopters dropped money from the sky.
Rebel One being BTMFJ who were reported to be on the verge of rescinding their JGB Primary Dealership and Rebel Two being Commerzbank, reported to be considering storing cash in vaults rather than pay the ECB for the privilege of depositing excess cash with them.
We are now seeing signs in other parts of the world of rebellion by private sector banks aimed at circumventing the deleterious effects of negative central bank policy rates and government bond yields.
The Indian economy expanded by 7.9% in the final (March 2016) quarter of the 2015-16 financial year; India is now the fastest-growing major economy.
Iron ore prices trended lower across 2015 – from around US$70 a tonne (for 62% fines landed in China) in January, to a record low.
The perception of a lower for longer Fed has slowly but surely brought back an improvement in risk sentiment.
US equities ended day up between 0.5% and 0.65% with energy stocks leading the way on the back of gains in oil prices.
Is any week not a relatively busy or important one? This week, the key focus in Australia will be on the Reserve Bank’s June Board meeting
Looking at the spectrum of forecasts ahead of the release, the 38k print for May was 52k lower than the lowest forecast surveyed by Bloomberg while consensus was at 160k.
Markets mostly treaded water, and most US economic data was bang in line.
The final May Eurozone Manufacturing PMIs were left unrevised at 51.5, while the US Manufacturing ISM headline popped a little higher to 51.3 from 50.8 (50.3 was forecast).
Expenditure components show exports driving growth, but rebalancing still evident.
Online sales increase 0.3% in April 2016
Markets ended the month of May in a cautious mood amid mixed US data and a Guardian poll that suggested Britain to be more in favour of leaving the EU.
As far as the foreign exchange markets were concerned, the USD was a touch softer overnight after having made some gains in the Asia session yesterday.
The past week has seen interest rate markets continue to receive warnings from various Fed speakers – including Fed Chair Yellen – that US interest rates are likely to rise in the next few months.
In her much awaited Harvard University appearance, Fed Chair Yellen endorsed recent Fed rhetoric, noting that it would be “appropriate” for the Fed to raise the Funds rate if economic growth picked up as expected and the labour market continued to improve.
A preview of the Q1 GDP data which will be released on Wednesday 1 June at 11:30 AEDT.
NAB Wellbeing Index: Around 1 in 6 “highly” anxious Australians are not coping - young women struggling most
A quiet night overnight with US Treasury yields moving 3.5bps lower to 1.8%, alongside weaker than expected core durable goods and capex orders.
The release of Australia’s National Accounts next week is likely to reveal a solid rate of economic growth in Q1 2015.
Australia and Singapore have further strengthened their already very close economic relationship with the May 2016 announcement of reforms to their main bilateral economic relationship
It’s been another night of measured markets with both European and US equities closing higher, US Treasury yields a little higher net on the day and the USD marking time. There has been a little more evident appetite for Sterling, while the Canadian dollar was also a little stronger, helped by higher oil prices and the Bank of Canada leaving rates on hold, as expected.
Australian agriculture has seen a number of significant developments since the release of the last NAB Rural Commodities Wrap
US and European equity indices had a solid night with gains in financial and technology shares leading the move higher. The USD was stronger against most other currencies although GBP was the outperformer. Meanwhile US Treasury yields ended the day higher along the curve.
Read more to learn how you could use asset-backed securities in your portfolio
In most of the major economies the outlook remains fragile, as a result of political uncertainty and disappointing earnings results. However recovery in equity prices has continued into April, primarily to the bounce in commodity prices and supportive central banks.
Today’s weekly focuses on what the low inflation environment means for monetary policy, and what discretion the RBA has in “looking through” low inflationary periods.
Markets have been generally drifting with FX, equity markets and bond yields trading in contained ranges. The short end of the US Treasury curve edged a little higher.
European and US equities ended the week in positive territory and the mild positive tone to the overnight session helped the S&P 500 move back to black for 2016.
A perfect opportunity for a Bee Gees classic with more Jive Talkin’ amongst US Fed officials with Lacker and Dudley hitting the wires overnight following Wednesday’s more hawkish Fed Minutes.
It was the release this morning of the FOMC April Minutes that’s gotten the attention of the wires and a noticeable chunk of market reaction to boot in rates, currencies, equities and gold.
US equities fell overnight and the US Treasury curve flattened to its lowest level since 2007 after solid data and hawkish Fed talk increased market’s expectations of US rate hikes.
Be grateful for small mercies. It’s a good job this 1971 T.Rex classic popped into my head as I was alighting at Wynyard station this morning, or else you might have been subjected to the ultra-cringe-worthy 1968 Dolly Parton ditty, “I’ll oil well love you” (I kid you not).
It was a quieter week for Australian markets after the previous week’s very large moves. The Australian dollar still ended the week lower, as markets continued to speculate that the RBA will follow up with another interest rate cut in the months ahead and as Chinese economic data disappointed.
Construction activity continued ramp up in April, but we are concerned about the sustainability of growth.
The rising US dollar in Friday’s APAC session gathered fresh momentum from incoming US data.
In a shock revelation, the Dallas Fed has published a note on its website saying that the impact of the Chinese economy on the U.S. has notably increased over the past two decades.
The rise in oil prices overnight were not enough to prevent retail driven decline in US equity markets. The US dollar was weaker across the board and a solid 10y US Treasury auction amid a cautious mood helped core global yields move lower.
The US Energy Information Agency revised up its forecasts for oil prices for this year and next, lifting its forecast for WTI for this year by nearly $6/bbl to $40.32 from $34.37.
A credit-fuelled rebound in China’s construction activity has breathed new life into the country’s beleaguered steel industry.
The USD has continued its ascendency with the DXY index up for a fifth day in a row.
The USD has slowly, but surely continued its rebound while equities on either side of the Atlantic fell for a second consecutive day.
The 2016-17 Budget includes a number of measures for agriculture, relating to water and drought, infrastructure, innovation and trade as well as revenue and savings measures.
No, the title is not a summation of Australian Treasurer Scott Morrison’s first Budget handed down last night. Rather it looks to be the most apt description of market price action – in FX at least – apropos the smart overnight session reversal in the fortunes of the Japanese Yen and the Euro.
While yesterday’s fall in the Nikkei, partly reflected a catch up move given Friday’s holiday in Japan, this negative sentiment spread throughout Asia with all markets excluding Thailand posting small decline for the day.
Firms continue to see a favourable business environment, despite pairing back some of the strong gains seen last month.
The 2004 Saturday Night Live fictional character, recently brought back to life in song on Cortney Barnett's brilliant debut album, would have been in her element on Friday.
NAB surveyed Australian business integration with East Asia in September 2014 and China in December 2015. Recent headline trade data indicate a reversal in the decades-long process of growing integration with our region as exports have declined.
Quarterly U.S. Gross Domestic Product (GDP) growth slowed to a weak 0.1% qoq, or 0.5% annualised in the March quarter. As the same quarter last year was also weak, there was little change in the over-the-year growth rate which has been around 2% for the last three quarters.
For US equities, it was a case of one bad apple in the bunch with investor Carl Ichan stating he sold his stake in Apple.
Business conditions unchanged at +3, slightly below the long-run average. Business confidence eased to the neutral mark in the March quarter.
Australian consumers spent an estimated $19.3 billion online in the past year, primarily on homewares, groceries, media and fashion. According to National Australia Bank’s (NAB) latest Online Retail Sales Index in-depth report, online spending increased 12.4% over the last year.
So it is that following yesterday’s CPI report, NAB altered its 3 May RBA call to now expect a 25bs reduction in the Cash Rate (to 1.75%).
Today’s CPI produced the lowest quarterly and annual rates of core inflation recorded since the RBA commenced inflation targeting - and rates that are starting to diverge below the lower end of the Bank’s target band.
Sentiment in Australian commercial property markets softened a little, but remains well above long-term average levels. Despite some pull back, CBD hotels and office markets continue leading the way, with NSW still at the forefront by state and WA floundering.
While the market is very sensitive to the CPI and the AUD and rates markets might see an immediate knee-jerk reaction, the market is not hanging on this number as one that might swing the RBA into action or inaction at upcoming meetings.
Tomorrow’s CPI will be another low print but unlikely to sway the RBA into easing monetary policy given the continued resilience in the non-mining economy. NAB’s forecast for the March quarter CPI is for Australia’s official inflation rate to be 1.6% y/y (after 1.7% in Q4), the sixth quarter below the 2-3% official RBA target range.
A resilient economy, solid employment growth, strong household consumption and lower levels of consumer anxiety helped support the charity sector and the ongoing generosity of Australians.
The Eurostoxx 50 ended 0.75% down and the S&P 500 -0.18%.
In our April update, Nick Ryder, JBWere Investment Strategist, highlights that the local equity market faces a number of headwinds from the rise in the AUD, lower commodity prices, higher potential bank capital requirements and profit margin pressures.
The AUD has flown back down with the 77 handle this morning, pulled back somewhat by a dip in oil prices for once, WTI down $0.59 to $43.60 and Brent off $0.91 to $44.89, the Aussie’s commodity cousins, the CAD, NOK, RUB and the NZD all lower this morning.
The March quarter NAB Business Survey shows both a resilient non-mining recovery and an outlook that has continued to improve. Both business conditions and confidence remained at levels similar to that seen in the previous quarter.
Oil prices took another leg higher last night following a US Energy Information Administration report that showed a sharp decline in US distillate stockpiles.
Our forecasts point to Australian agricultural prices trending generally somewhat higher in AUD terms this year, despite challenging international conditions. However, the stronger AUD presents a risk to local prices.
The NAB Residential Property Index rose to +6 in Q1’16 (+1 in Q4’15), but is still sitting below its long-term survey average (+13).
Broad USD dollar weakness and higher oil prices have boosted risk assets overnight with energy and material shares the outperformers in both Europe and the US.
When the US after-market for oil opened early in our day yesterday, WTI and Brent opened around 6% down on Friday’s close.
The latest NAB business survey and labour market data accord well with the RBA’s policy stance – low inflation provides ample scope to ease monetary policy further should that be necessary to support the economy, though activity and labour market data do not suggest that such a move is necessary
Regardless of whether an agreement yesterday by major producers to freeze oil production would have had any meaningful impact on oil prices beyond the psychological boost it might have provided.
2016 is shaping up to be a crucial year for copper producers and copper markets. Its biggest consumer, China, is going through a period of slower economic growth, with structural transitions under way and a depreciating currency.
China becoming a major player in global mergers and acquisitions.
In this video Alan Oster talks about Australia’s “Sharing Economy”.
Risk sentiment took something of a breather overnight without going into reverse.
Risky assets have continued to benefit from an improvement in sentiment. Bank stocks have led the surge in equity markets and most commodities have also enjoyed some gains, despite of a pullback in oil prices.
The sharing economy is growing at a rapid rate, as new business models based on ‘access to’ rather than ‘ownership of’ physical and human assets like skills, time and space, continue to emerge.
NAB, in conjunction with CoreLogic (RP Data), brings you the Australian Housing Market Update for April 2016.
There was an improved tone in global markets this month.
The April 5th Monetary policy meeting was a landmark in terms of the policy measures announced. The 25bp cut in the policy rate was accompanied by a raft of measures to boost liquidity and ensure more effective monetary transmission by banks.
Yesterday’s NAB Business Survey bolted a stronger 76 handle on to the AUD, the currency finding support through the day and again overnight, trading this morning toward the top of its overnight range, currently at 0.7685/90, up 1.2%.
The forces shaping the economic outlook are broadly unchanged.
NAB Business Survey suggests non-mining recovery is broadening, and bolstering confidence despite global uncertainties.
European markets ended the day in positive territory boosted by Italian banks following hopes of a government support package while in the US, equity indices erased early gains and ended the day marginally lower.
RBA more open to the need to cut again but for now the reasons aren’t sufficient.
A fairly uneventful offshore session on Friday saw US stocks recover some of Thursday’s losses, bond yields pushing back higher while the US dollar was softer across the board.
Sorry, I couldn’t resist the title seeing as how Janet Yellen, Ben Bernanke, Alan Greenspan and Paul Volcker are all about to jump up on stage together.
Consumer anxiety has now fallen for its third quarter in a row as recovery in the non-mining economy supports the labour market.
An improvement in risk appetite has helped global equity markets recovered some grown overnight with the Nikkei a notable exception. FOMC minutes revealed an April hike was discussed, but a cautious approach appears to be well entrenched. A pick up in oil prices contributed to the positive move, but the strength in the yen continues to weigh on Japan’s equity market.
Local market’s finished up on Tuesday in a distinctly ‘risk-off’ frame of mind, and that sentiment has extended throughout the European and US sessions
In what was a quiet night for markets the softness in oil prices spread into other commodities and it has weighted on the AUD and other commodity related currencies.
In last month’s Update we noted that after a soft end to 2015, the partial indicators were pointing to a turnaround. Some new data (for February) and some hefty revisions to historical data later, March quarter 2016 GDP growth is now tracking at only 0.7% qoq (annualised) according to the Atlanta Fed’s ‘Nowcast’.
The key Australian event of the week will be the RBA Board Meeting tomorrow along with a speech by RBA Assistant Governor Kent on Wednesday.
There was nothing not to like about Friday’s US data deluge. Payrolls just beat expectations at 215k vs. 205k with trivial revisions.
It’s been a night of consolidation in the main as markets await the arrival of key data over the next 24 hours with Super Friday’s deluge.
Overall the picture is of an economy struggling to generate any momentum.
Equities and non-US dollar currencies continue to bask in the afterglow of Janet Yellen’s Tuesday night speech.
Online sales increase 0.8 % in February 2016.
Fed Chair Janet Yellen has reiterated her views that it is appropriate for the Fed to “proceed cautiously” in raising interest rates.
Before the official start of the 4-day Easter break, there was a bit of good news about the US economy.
The commodity currencies were sold lower overnight, with the AUD feeling the brunt of the selling.
Understanding the structure of different investment options is key to choosing what’s right for your objectives and risk profile. Sally Campbell from JBWere, explains the benefits of the main types of product you can include in your portfolio.
RBA Governor Glenn Stevens speech yesterday came and went without any fanfare as far as AUD comment was concerned
In our March update, Nick Ryder, NAB Private Wealth Investment Strategist, talks mixed messages with slumps in developed markets, India and China while the US posted slight improvements and Australia performed reasonably well. Meanwhile, Europe’s inflation entered negative territory.
Two Fed officials suggesting Fed hikes could be coming sooner rather than later.
Labour market suggests RBA on hold but keep an eye on inflation expectations Markets again moving around sharply with a less aggressive Fed (two rate hikes now expected in 2016 versus four previously) seeing the US$ broadly weaker and $A stronger. Australian labour market data show slower trend employment growth in recent months, though some […]
Following a tumultuous Wednesday and Thursday, markets went out with something of a whimper on Friday.
The first two months of the year have seen the housing market regain some of the losses recorded over the final quarter of 2015, with capital city dwelling values rising by half a percent in February following a 0.9% rise in January to take our hedonic index 1.4% higher over the year to date.
Nothing better than Tom Petty to the end the week.
As expected by most, US Fed Officials left the Fed funds rate unchanged at 0.25% - 0.5%.
Any excuse playing homage to David Bowie (originally unreleased promotional film shot in 1969, in case you wondered).
Chinese authorities target marginally slower growth, but are content to let debt position deteriorate.
Casting a wider net over China’s total debt Last month, we highlighted China’s debt as one of the key concerns around its economy in 2016. Debt levels have risen sharply since the Global Financial Crisis, particularly outside the traditional banking system – where the scale of borrowings is frequently under-estimated. This month, we’re digging a […]
The past week broadly saw an extension of the prior week’s price action, which broadly continued the rally in commodity prices.
Central banks are again in the spotlight this week.
Latest ECB move highlights negative interest debate.
Consumer confidence holding up, business sentiment stabilised in February
The centrepiece of overnight attention was always going to be the ECB policy meeting.
This morning the RBNZ cut its policy rate by 25bps to 2.25% and it signal that further easing may be required.
The Housing Market Report is your guide to the current home value trends in Australia. You’ll find information about what’s happened over the last 12 months, as well as NAB’s expectations of where prices are headed in the near future.
Global: We are not expecting any acceleration in global growth in 2016. Australia: The recovery across the non-mining economy remains on track.
Investors remain concerned over the apparent soft demand for China’s exports.
We are not expecting any acceleration in global growth in 2016.
Improvement in business conditions adding to evidence of a buoyant non-mining recovery. Business confidence also resilient despite global uncertainty
Ever had one of those moments when you start the day and you have a rather weird moment to start the day?
In this report, we take a look at longer term wellbeing trends, focussing on those groups that have historically reported the lowest wellbeing.
Price developments over the past week supportive of NAB view that markets had become overly pessimistic on the growth outlook – commodities, equities and the $A all rally strongly; bond yields rise sharply.
Overall, 2015-16 has been a broadly promising export year for most major Australian agricultural exports.
We weren’t alone on Friday thinking that the risks heading into the US employment report were for a disappointing headline non-farm payrolls print
It has not been a massive night in terms of market direction, the Australian dollar again capturing interest and making some further net gains.
The focus remains very much on the impact rising supply is having on some commodities.
In dollar terms, we estimate Australians spent $19.2 billion on online retail in the 12 months to January 2016.
Well, not a storm, but the AUD is riding higher after much stronger-and-expected GDP for the December quarter.
The Australian economy remains resilient amidst an uncertain global backdrop.
China’s decision to reduce the required reserve ratio on major banks (-50bps) set the tone in yesterday’s Asian session
Chicken Little would have been in his element today. The sky may not be falling, but plenty else is.
Markets calm down but plenty on the menu this week
The major themes driving the expenditure measure of GDP are unlikely to surprise.
In our second annual survey, we take another look at what makes this country such a special place to live.
Plenty of official hand-wringing regarding downside risks to global growth and which was reflected in the communique issued on Saturday after the 2-day G20 meeting of finance ministers and central bankers in Shanghai.
It’s been an interesting night as far as the markets were concerned.
It was a session of two halves with a risk off during European session spilling into the first part of the New York sessio/
Risk markets have turned turtle overnight despite some reassuring words on monetary policy.
Innovation is a key driver of business success. It’s typically defined by a firm’s knowledge of the market and customers, constant process reviews, learning from failures and passion and drive.
European and US equity markets started the week in a positive tone boosted by a commodity led improvement in risk sentiment.
The Fed has consistently signalled rate hikes will be gradual.
Another volatile week in markets with equity markets up and the bond market also rallying on expectations of the US Fed delaying further rate hikes.
Our forecasts point to Australian agricultural prices trending higher in AUD terms in 2016, despite challenging international conditions.
The 1986 film flop starring Madonna and Sean Penn cost $17mn to make and grossed just $2.3mn at the US box office.
In the wake of yesterday’s weaker employment report, the AUD/USD jagged down from around 7182 to 7140 and that’s proven to be a base overnight in a 30 point range.
Sally Campbell from JBWere looks at the carbon footprint considerations within fund managers’ assets, highlighting that some are more progressive than others.
In this discussion of alternative investments, Nick Ryder explains that the increased weighting in this asset class is the result of less attractive prices in traditional asset classes.
Nick Ryder, highlights that January was a difficult month for financial market with renewed investor jitters over slow growth in China and falling commodity prices.
In this December 2015 quarter edition of the NAB Online Retail Sales Index, we have responded to market changes by including separate data on takeaway food and smaller online retailers.
It was something of a risk-on night with commodity and emerging market currencies back in favour for once.
The global equity rally that began on Friday has started to show signs of fatigue
The United States of America (US) is the economic powerhouse of the world, with its largest and richest consumer market. Last year marked the 10th anniversary of the Australia-United States Free Trade Agreement (AUSFTA), which came into force in January 2005.
Global equities extended their Friday rally helped along by a strong lead from Asia.
RBA watching international developments closely; far from panicking about the current state and momentum in the domestic economy with signs of the economy’s emerging rotation
Labour market improving - jobs growth remains strong
European and US equity indices ended the week on a positive note, boosted by a rebound in bank stocks and a jump in oil prices.
In this video, Group Chief Economist, Alan Oster discusses insights from the latest NAB Monthly Business Survey.
Janet Yellen did her return testimony overnight, this time to the Senate.
In this video, Group Chief Economist, Alan Oster discusses insights from the latest NAB Quarterly SME Survey.
NAB Business Markets Podcast – February 2016 Video transcript (Word, 26kb)
Business conditions eased slightly to +3, slightly below the long-run average. Business confidence picked up to +3 in the December quarter.
If we had to try and summarise the best part of three hours of testimony before Congress by Fed chair Janet Yellen in one sentence, it would be something like “Janet fails to go full dove”.
Despite an overall improvement in commercial property market sentiment, the survey reveals that fewer developers are planning to start new works in the short-term.
When the IEA released its monthly report last month, it caused quite a flurry warning “the oil market could drown in over-supply”.
Business confidence is sub-trend, but holding up reasonably well in the face of financial turmoil. Business conditions eased, but still consistent with non-mining recovery
The impact of oil complicates the outlook.
Yeap, the heading says it all. We had a brutal price action overnight with risk assets hammered while safe haven assets were bid.
Welcome to and best wishes for the Year of the Monkey.
Chinese share markets have plunged since the start of the year, but still have some way to go.
In the words of my BNZ colleague Jason Wong, not even strong words by ECB President Draghi and BOJ Governor Kuroda have been enough to talk down their currencies against the big dollar’s recent dip.
Since early November, oil prices have resumed a clear downward trend, punctuated by episodes of sharp declines during early to mid- December and the first half of January.
Business outlook remains positive despite some pull back in the final quarter of 2015. Suggests global uncertainties continue to be the greatest risk.
Online sales rose 1.8 per cent in December 2015.
There’s still two hours to go until the New York close, but foreign exchange markets are having their biggest night of the year so far.
The NAB Residential Property Index fell to +1 in Q4 (+10 in Q3) and now sits well below its long-term average (+13).
In the aftermath of the RBA Board meeting, the AUD was whipped around, initially rallying on “no change”
Friday’s BoJ powered equity rally stalled overnight with disappointing data releases and fading hopes of output cuts in oil weighted down on sentiment.
Domestic economy still arguing for unchanged RBA policy
U.S. GDP growth slowed in the December quarter to 0.2% qoq (0.7% annualised).
Friday’s sharp improvement in global risk sentiment sparked by the Bank of Japan’s largely unexpected decision to join the ECB, Danish and Swiss National Banks
Mixed oil messages were the main source of market volatility overnight.
The FOMC post meeting statement played a very straight bat, not locking themselves in to one course or the other as far as the March 17 meeting decision is concerned.
2016 got off to a bad start in global equity and commodity markets and in light of recent financial market turmoil in Australia, the NAB Monthly Business Survey provides a timely indication of how market movements have so far affected business sentiment.
And yes, it was still all about oil with another classic short squeeze, this time seemingly triggered by comments from the Iraqi Oil Minister speaking at a conference in Kuwait.
The markets make significant reversals on little fundamental developments, suggesting positioning and sentiment had become extreme.
We have lowered our 2016 global forecasts to 3.0% (from a revised down 2.9% in 2015)
Business confidence resilient to financial market turmoil (for now). Business conditions suggest non-mining recovery remains on track
In this video Cindy Batchelor, NAB Business Executive General Manager, discusses why innovation is so important for business.
Oil having been the main driver of most of the market price action of the past two weeks, it was Friday’s near 10% rebound that was the catalyst for much of Friday’s retracements.
ECB talk of further easing in the future boosted risk assets overnight. Equities posted solid gains in Europe and in the US they look set to end the day in positive territory.
The rotation in economic activity towards the non-mining states is continuing, while conditions in mining states have become more challenging as commodity prices have fallen further.
Another volatile night my friends. Well that was as far as equity markets are concerned the E600 European index down a cool 3.2%.
China’s latest national accounts data showed a slowing trend for China’s economy in the December quarter. The services sector - the main engine for growth over 2015 – also slowed in the December quarter.
Flipping through the Eagles song list on the way in, none of the many great Glenn Frey-penned tracks struck me as particularly applicable titles to describe overnight markets.
The wild start to 2016 has continued in the past week. Equities, commodities, commodity currencies, and yields are all lower.
With US markets closed in observance of Martin Luther King Day, the relatively quiet overnight session is probably not reflective of the current collective mood.
Australian producers have been shielded from much tumult by a lower Australian dollar and a large and relatively stable domestic market.
The falls in global oil prices over the last year or so are fundamentally a reaction to oversupply in global markets – as US new oil supply comes on board, OPEC puts the squeeze on profitability of new sources of supply by refusing to cut production.
In a redux of the previous Friday, slumping oil prices were the primary catalyst for the latest pressure on commodity and emerging market currencies and global risk assets, alongside safe-haven support for Treasuries.
We expect another year of moderate growth in 2016, with further labour market improvement and inflation starting to move back towards the Fed’s target.
Today’s title is our final tribute to the late musical genius, David Bowie. Where are we are now? Is the first single from David Bowie’s 25th album released on the morning of his sixty-sixth birthday in 2013.
Less than hard-core Bowie aficionados can be forgiven for not immediately humming this track, which features on the Blackstar album released two days before his untimely death.
‘Under Pressure’ was a particularly apt title to yesterday’s daily from my colleague Rodrigo by way of homage to the late great David Bowie.
In this video Alan Oster talks about the state of innovation in Australia.
Today's title is not only fitting to what has transpired in markets over the past 24 hrs, but it also serves as a tribute to the passing of a music legend.
No news in falling commodity prices. The big questions for 2016 are residential construction cycle and the non-mining economy. We expect RBA to be on hold right through 2016.
On another day, news of a near 300k rise in US payrolls, still quite benign earnings growth and a steady but near-full employment unemployment rate (5.0%), might have sent equities and the dollar to the moon and bond yield higher.
Similar themes from yesterday are at play today– China in the spotlight with its devaluing currency and equity market shenanigans; lower commodity prices and global equity markets tumbling; and a flight to the safety of the Yen.
The latest seasonally adjusted NAB online retail sales index shows sales grew 0.7% in November, an improvement on the contraction in October.
EGM Capital Financing, Steve Lambert, discusses two common themes that were present over the past 12 months - Innovation and volatility. It seems that 2015 saw more firsts in the market while at the same time it seeemed markets were closing just as quickly as they opened.
Market jitters continued, with another sea of red for equity markets and Yen being the favoured currency.
It was a more “normal” overnight trading session, following the big risk-off move on Monday night.
The first day of trading for many markets was a memorable one, with some big falls in equity markets. With the plunge in risk appetite, the Yen was the best performing currency
In this video Alan Oster discusses the opportunities for SMEs in 2016.
Investors ended 2015 in a defensive stance. Following the risk aversion tone seen in the previous day, equity markets were sold on Thursday while core global bonds benefited from a safe haven bid.
Ever get the feeling that you’ve been here before?
Some argue that there can’t be too many better analogies to predicting markets than playing cards or rolling dice, so the late Lemmy’s classic The Ace of Spades from the band Motörhead seems very apt this morning.
Alan Oster talks to the reasons behind his optimistic economic outlook for Australia in 2016 including the benefits in the investment in the mining sector and consumer confidence.
Heading into Wednesday’s New York close, the S&P 500 is showing a gain of about 1.2% on the day, which equates to a rise of just 0.2% year to date.
Alan Oster talks to the economic outlook for Australia and whether we are heading for a recession.
NAB’s Dean Pearson shares his economic outlook for small-to-medium business owners in 2016 as Australia prepares for life after the mining boom.
The NAB Quarterly Australian Behaviour Survey (formerly NAB Consumer Anxiety Report) shows consumer anxiety falling again (and to its lowest level since Q4 2014), amid more signs of improvement in the labour market and non-mining segments of the economy.
Moves in oil prices remain the main driver for markets amid a decline in trading volumes ahead of the Christmas holiday break.
The NAB Group Economics team identify 10 global and domestic themes which will have bearing on the economic and financial market outlook for 2016.
There are plenty of opportunities for agribusiness in 2016. Four agri specialists from NAB – Khan Horne, Phin Ziebell, Greg Noonan and Rodd Ludeman, share their predictions.
Spanish politics has been a watch point for markets since the weekend with the national election not producing a clear majority for any one party and not an obvious coalition likely to be formed, according to Spanish political commentators.
We draw attention in this Weekly to the importance of growth in the population to the economy and how population growth has slowed in recent years.
Many Australians dream of a financial windfall that would significantly improve their lives forever, but how much is enough? In this special report, we ask over 2,000 Australians to tell us how much they need.
Friday was one of the four ‘triple witching’ occasions of 2015 (expiration of stock index futures, index options and individual share options) –sometimes known as freaky Friday.
While European equities closed higher overnight, the US market opened down and it’s remained that way into the last hour of trade.
NAB Business Markets Podcast with Mark Todd and Peter Hartley.
Nine and a half years on from the last Fed rate hike and seven years on from when interest rates were first set at the effective zero lower bound (0-0.25%) the Fed has seen fit to sound the death knell for ZIRP, lifting the target rate for the fed funds rate to a range of 0.25-0.5%.
The modest recovery in industry unlikely to continue, China is moving away from the ‘old economy’.
China’s online retail sales have rapidly expanded in recent years, as rising disposable incomes and growing internet penetration have supported the sector’s growth.
The Indian market offers great potential for Australian exporters. Already the world’s third largest economy and growing by over 7% annually, India looks set to overtake China as the world’s most populous country in the next 7 years.
Unlike the rest of us who are now waiting to see what Janet Yellen delivers this time tomorrow, RBA Governor Governor Glenn Stevens has gone early, the AFR publishing its now traditional end-of-year interview with him overnight.
Initially it was a choppy night for markets, carrying on with last week’s risk-off mood with oil initially testing new lows and European stocks heavy.
An important week as Australian markets prepare to wind down for Xmas and the summer holidays, with the MYEFO Budget outlook on Tuesday expected to reveal a mild worsening in this year’s deficit to $38bn and to bring to account lower long-term growth assumptions.
Friday night session saw a surge in risk aversion with sharp losses in equity indices, the USD underperformed against other majors while safe haven demand pushed core global yields lower.
A Fed hike would be no surprise to financial markets. This should mean the impact of rate hike itself is limited, given the forward looking nature of financial markets.
There have been some volatile shifts in the global economy recently, prompting pessimists to declare that there’s a 50–50 chance of Australia going into recession. However, a closer look at the numbers behind the forecasts shows there’s plenty of reason for optimism.
A lot of the attention overnight remained centred on the commodity space with oil prices down another 1%, Brent crude at $39.70, down 0.97%.
As we are about to press the send bottom, the RBNZ has cut its key rate to 2.50% from 2.75%. In the statement the RBNZ has noted that it expects to reach its inflation goal at current policy settings and that the rise in the exchange rate is unhelpful and further depreciation would be appropriate.
In Australia, Q3 GDP figures were consistent with our view that the recovery across the non-mining recovery is broadening, and recent business survey results suggest this momentum continued into Q4.
India’s economy accelerated in the September quarter 2015, with Real GDP growing by 7.4% yoy, up from 7% in the June quarter. NAB Economics is forecasting a 7.5% expansion in 2015, followed by 7.6% in 2016.
Variable economic growth outcomes continued into Q3, with real GDP picking up strongly to 0.9% q/q, following a revised weak 0.3% outcome in Q2 and a strong 0.9% increase in Q1. Year-ended growth picked up moderately to 2.5% y/y, but remained below trend.
The AUDUSD dipped below the 72c mark overnight amid the ongoing weakness in oil and bulk commodities.
In Australia, Q3 GDP figures were consistent with our view that the recovery across the non-mining recovery is broadening, and recent business survey results suggest this momentum continued into Q4.
Consistently above average business conditions are an encouraging sign that the apparent non-mining sector recovery continues to gain traction, despite relatively muted levels of business confidence.
Commodities were front and centre of market attention overnight, with oil prices taking another sizeable hit, both WTI and Brent crude down between 5-6% in the wake of OPEC officially abandoning its 30mb target late last week.
Economy a little ahead of RBA forecast track.
The US employment report virtually matched expectations (NFP +211k, unemployment steady at 5%) and effectively confirms a Fed lift-off in two weeks’ time is a done deal.
Commodity markets remain under pressure, reflecting concerns over emerging market demand (especially from China), at a time when the supply of many commodities is on the incline. Anticipated policy tightening by the US Fed is also having an impact.
The violent upwards reaction in all things euro in response to a set of ECB decisions that underwhelmed expectations.
“Were the FOMC to delay the start of policy normalization for too long, we would likely end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of our goals,” Fed Chair Yellen told the Economic Club of Washington overnight.
NAB Business Markets Podcast – RBA & US Fed Christmas Messages with Mark Todd
The AUD is back trading with a 73 handle for the first time since 19 October, helped along by a disappoint US ISM manufacturing print.
This report presents our forecasts for Australian agricultural exports for 2015-16 as well as estimates for 2016-17. Overall, 2015-16 looks to be a promising export year for most major Australian agricultural exports in value terms, supported by a lower Australian dollar.
At -0.6% the latest seasonally adjusted NAB online retail sales index shows sales contracted in October, a deterioration on the revised 1.4% recorded in September.
Well not quite, in terms of manic that is. China received the official nod from the IMF for inclusion in the SDR as entirely expected
Economic partials for Q3 have been mixed, but point to stronger real GDP growth of 0.8% in the quarter (up from 0.2% in Q2), as a series of one-offs that weighed on Q2 growth recede.
A huge week for data and events.
US markets were open on Friday, though more in body than spirit. The major indices were little changed.
In the 1975 Steely Dan classic, the song Black Friday refers to a 24 September 1869 ploy by a group of wealthy US investors to corner the gold market and drive the price higher, but who were subsequently foiled when the government got wind and released $4 million worth of gold onto the market.
It’s 100 years ago today that Albert Einstein formally presented the results of his eight year study into gravity – the general theory of relativity. Good on you Albert.
Markets were rattled in the early part of the overnight session following news that Turkey had shot down a Russian fighter jet near the Syrian border, after allegedly repeated warnings of Turkish airspace violation.
Labour market conditions remain tight with the unemployment rate at 3.4%; wage growth though remains restrained.
The USD got off to a cracking start this week, gaining against all the majors, and taking EUR/USD below 1.06 for the first time since April.
An important week for Australia, with a speech by the RBA Governor Tuesday, the release of key investment figures that feed into next week’s GDP, as well as the latest survey of investment intentions for 2015-16.
Friday’s session was hallmarked by comments from ECB President Draghi, which kept markets on the scent for a range of easing measures at next week’s hotly-anticipated meeting.
It’s been a night of consolidation for currencies with the US dollar giving up some ground, the Bloomberg spot US dollar index losing 0.67% overnight.
Hat tip to one our London traders for plagiarising today’s title.
Office property re-emerges as the strongest commercial property sector. Overall sentiment in Australian commercial property markets has moderated a little, but it remains at elevated levels and continues to vary widely across sectors and states.
Nick Ryder, NAB Private Wealth Investment Strategist, highlights how equity markets recorded their strongest rise in four years in October and continue to offer the best prospective returns of any asset class.
It is a bit odd coming in to see hard commodity prices under the pump (including a $2 drop in iron ore prices, new cycle lows for copper and oil off another buck) but the AUD at the top of the G10 FX leader board.
Agricultural markets continue to react to the unfolding El Niño event, albeit in varying directions. Overall, the NAB Rural Commodities Index was stable in October.
In a relatively quiet session, the impact from the Paris attacks on global markets has been fairly muted. The USD is stronger against all G10 currencies with the euro and NZD sitting at the bottom of the leader board.
We review last week’s stunning Australian labour market data. While we don’t believe the large moves in either the employment or unemployment rate, we believe the signals - that employment is strengthening (driven by NSW and importantly an improving trend for QLD)
The latest edition of Business View magazine is now available to download for free on iPad and iPad mini via our app, NAB Think.
News of the multiple terrorist attacks in Paris and claimed by Islamic State came about 4.30pm New York time so after futures markets and US stock exchanges had closed for the week but before spot FX and cash bonds had finished.
There is still solid underlying momentum in the economy despite the slowdown in U.S. GDP growth in the September quarter.
Welcome to Friday the thirteenth. Cautious is advised for anyone suffering from triskaidekaphobia.
Under NAB’s forecasts, China’s economic growth is expected to slow from 6.7% in 2016 to the Five-Year Plan target of 6.5% in 2017.
China’s service sector has been the main contributor to economic growth in recent times – particularly as trends in the industrial sector continue to weaken. In Q3, the services industry (led by finance) maintained fairly stable growth.
Lots of interest overnight whether ECB President Mario Draghi would throw more fuel onto the ECB stimulus expectation fire, schedule to speak at a BoE sponsored open forum on Financial Market Reform event in London.
Global growth remains sub-trend and there is little sign of an imminent acceleration in the pace of expansion while in Australia, we remain cautiously optimistic that the gradual recovery in the non-mining sector is gaining traction.
Not a big night as far as market movements are concerned, one extension of a theme being the continued ascendancy of the big dollar that has gained a little more momentum, the Bloomberg spot dollar index up 0.12%.
In Australia, we remain cautiously optimistic that the gradual recovery in the non-mining sector is gaining traction. Recent outcomes from the business survey support this contention with business conditions holding up at a high level in October, and the unemployment rate holding steady.
Business conditions remain encouragingly robust, maintaining the solid gains obtained over the past year despite less than impressive levels of business confidence.
A night of consolidation for markets with inconsequential data not pushing markets one way or the other.
Another busy week in Australia with the NAB Business Survey, Consumer Confidence and October Labour Force data all released.
Friday’s US payrolls report delivered across-the-board strength and markets responded to script, the dollar and bond yields both sharply higher but equity markets not sure whether to embrace the more positive US growth signals or fear the seemingly near-inevitably of December Fed ‘lift-off’.
Australian residential property price growth has continued to surpass expectations in recent quarters, suggesting more limited scope for further gains.
Not a massive session as far as new market direction was concerned overnight ahead of payrolls tonight.
Based on incoming information, we have modestly reviewed our GDP forecasts to 2.6% in 2015/16 and 3.0% in 2016/17 (annual average). Overall, NAB Economics remain of the view that the recovery in the non-mining sector is slowly becoming more well entrenched.
Business conditions among Australia’s ASX 300 firms rose to a new survey high of +20 points (up +12 from +8 points in the previous quarter). The gap between very big and small business is now at its widest margin since this survey began.
Markets took their cue from Fed Chair Janet Yellen overnight, testifying before the US House Financial Services Committee on bank regulation.
A rising commodities tide lifted all boats overnight, with an improved tone in risk evident in equities, bonds, and currencies. The AUD outperformed after the RBA stood pat yesterday. It is a very busy day ahead.
Overall, we assess this year’s El Niño as a moderate risk to farm production. We forecast farm GDP (2% of the total economy) to be flat to moderately lower (0 to -5%) in 2015-16, which will only marginally subtract from headline GDP.
This week in Australia is of course all about the RBA Board meeting on Tuesday and the November Statement of Monetary Policy on Friday. Our special focus this week is on a number of charts showing that the RBA has already eased pro-cyclically and the non-mining economy is improving.
Currencies, for the most part, took a back seat in a largely so-so session for broader financial markets.
Unlike Wednesday and Thursday morning (post FOMC, RBNZ), Friday was not a big night for markets and following the BoJ’s earlier ‘no change’. End of month rebalancing flows appeared to dominate price action, meaning a slightly softer US dollar (DXY -0.35%, BBDXY -0.42%).
U.S. GDP growth slowed in the September quarter to a rate of 0.4% qoq (1.5% annualised).
The NAB Quarterly Business Survey provides a rich source of information about Australian business, their behaviours and the environment in which they operate. In addition to questions around sales, profitability, employment and the like, one focus of the Survey revolves around currency markets.
At 1.1% the latest seasonally adjusted NAB online retail sales index shows sales accelerated in September (possibly iphone 6S related), an improvement on the 0.6% recorded in August, and a rebound on the July contraction (-1.4).
Australia’s wellbeing has risen to its highest level since mid-2013, with levels of happiness, life satisfaction, life worth and anxiety all improving, the latest NAB Wellbeing Index has found.
With the echo of the FOMC still ringing in its ear, the market re-priced the odds of the Fed moving in December, lifting the probability to a 50/50 call, those odds having been tracking at a less than one in three chance before the FOMC.
In the quarter, SME business conditions stayed unchanged at +4 index points. Within the components of business conditions, trading conditions were particularly strong, which flowed into modestly better profitability conditions. However, employment conditions remained subdued.
Housing market sentiment softens as expectations for future price growth and rents are scaled back in most states. Queensland is the exception, replacing NSW as the most optimistic state for residential property and tipped to lead the country for price and rental growth over the next 1-2 years.
Global concerns and the potential negative feedback loop to the US economy and inflation have been dialled down. At the same, concerns about the strength of the labour market have been somewhat dialled up, the Fed noting that “the pace of job gains slowed and the unemployment rate held steady”.
The US dollar sits near the top of the currency leader board this morning, retaining its composure, though more by default of weakness elsewhere.
It was a contained night for markets, equities a little heavy for no apparent reason other than perhaps some nerves ahead of Thursday morning’s FOMC announcement.
Charitable giving in Australia grew in the year to August, with people continuing to give more to charity despite persistent doubt about the economy. Overall giving to charity grew by 4.9 per cent in the 12 months to August 2015. However, this is down from growth of 7.8 per cent the previous year.
Watching the tears streaming down the face of Pumas head coach Daniel Hourcade a couple of hours ago, ‘Don’t Cry For Me Argentine’ was the obvious title for today’s missive, but it’s already looking a little overused in the Twitter-sphere.
ECB President Draghi stepped up to the plate last night, setting equity markets alight and scuttling the EUR. Draghi effectively preannounced further easing in policy at its 3 December meeting.
Leading indicators were generally more positive in Q3 2015. Forward orders jumped to their highest level since late 2009, while expectations for conditions in 3 and 12 months time both improved.
Not a massive night for currency markets and markets in general, though with risk-off tinges; stocks were flat in Europe and softer into the US close.
The NZD at least has shown some movement and to some surprise, the Canadian dollar sits at the top of the G10 FX leader-board.
Agricultural prices continued to diverge in September. Most major grains fell as did fruit, vegetables and trade lamb (reflecting seasonal trends) however dairy prices strongly rebounded and sugar, beef and rice were also higher in AUD terms.
China’s latest national accounts data showed a slowing trend for China’s economy in the September quarter falling below the annual growth target for the first time this year. As a result, we are revising our forecasts for China’s growth.
Though there isn’t too much to say about last night’s markets and after the local market yesterday was, within 15 minutes of the China data, already checking out the coming weekend’s weather forecast.
The Trans Pacific Partnership delivers tariff reductions and improved market access for Australian agricultural products. With TPP countries representing a third of Australian agricultural exports, these benefits are potentially significant.
In this weekly, we consider the implications for monetary policy of last week’s independent mortgage rate increases by Westpac. RBA expected to watch how other intermediaries respond to the move and to assess how the move impacts the economy.
Friday was largely a lower beta replica of Thursday and where, recall, the higher US core CPI and further drop in US jobless claims were the key market drivers. Momentum carried though to Friday’s session, and wasn’t undermined by US industrial/manufacturing production data that was soft.
Much of Wednesday’s market price action in currencies, equities and bonds has been reversed. The exceptions here are the commodity currency trio of NZD, CAD and AUD which for the most part are continuing to resist the allure of a weaker US dollar.
China moving the international standard – already planned but delayed – could show that the transition in China’s economic growth model has progressed further than previously understood.
Led Zeppelin (1973) for the benefit of a generation younger than this scribe (i.e. most of you).
We are still forecasting little to no pick up in the pace of global growth and our domestic forecasts are unchanged this month, with real GDP expected to expand by 2.4% in 2015/16 and 3.1% in 2016/17.
In the five days through this Monday, the AUD had been the best performing major currency, rallying by just shy of 4% against the US dollar.
Global growth remains sluggish and below trend however in Australia, the ongoing high level of business conditions and trend improvement in key leading indicators.
There was a partial recovery in business confidence in September as the Government’s leadership uncertainties were resolved, while financial market volatility and emerging market concerns have moderated from the heights of the previous month – although market concerns remain elevated.
With the whole of North America on holiday (albeit US stock markets were open) it has been a predictably quiet night.
In this weekly we examine through the lens of job advertisements, the net effect for the labour market – and by implication the broader economy – of the many conflicting cycles currently impacting the evolution of the Australian economy.
Melbourne has overtaken Sydney as the best performing capital city over the past quarter in the latest NAB housing market update.
Measured employment growth has been softer in last two months. But the data are noisy and other indicators do not show any labour market softening.
AUD was the best performing G10 currency on Friday, and GBP the worse, the latter initially suffering on some dismal UK trade figures and which contrast starkly with the Eurozone’s current account surplus status.
The RBI announced a number of important regulatory measures, including greater overseas participation in Government bonds, and steps to boost the depth of the foreign currency market.
Earlier this week, Australia agreed to become part of a historic trade agreement, including countries that account for nearly 36% of global GDP and one quarter of global trade. This document provides a summary of the key measures, reported benefits and what we know so far about contentious issues.
The Sep FOMC minutes came and went and when all is said and done, it has not clarified whether the Fed is likely to be hiking before year end or later.
The rapid reversal in post-August 11 Emerging Market and commodity currency weakness continued with a vengeance overnight.
The IMF is hogging the news headlines overnight, though markets have long since given up seeing much information value in the now customary 6-monthly downward revisions to its global and country-specific growth forecasts.
It was a night for risk assets again with the S&P closing out its fifth day of gains, up another 1.85% with EM and European equities also performing well, the Eurostoxx 600 index up a cool 3.01%, with a sea of green gains across this writer’s screen.
In this Weekly, we set out six reasons why the RBA should not cut rates. Before that, it’s worthwhile to review Friday’s US payrolls report that was one out of the box, softer than expected in almost all respects.
Anyone looking for redeeming features in Friday’s soft US payrolls report was reduced to noting that the weakness in average earnings (flat on the month and unchanged at 2.2% y/y) may have been down to the fact that the Sep 15 mid-month pay day was excluded from the calculation
Australia’s agricultural producers, long frustrated by the inaccessibility of neighbouring Asian markets, now find themselves operating on a more level playing field given the signing of free trade agreements with Japan, Korea and China.
At the start of a new quarter, markets are struggling for a clear frame of reference, not yet sure whether bad economic news is good news for risk if it keeps the Fed at bay for longer, or is bad news because it serves to amplify concerns about the overall health of the global economy.
Key Points Agricultural prices diverged in August and into September – protein and fibres generally rose while crops trended lower. Overall, the NAB Rural Commodities Index was flat in AUD terms in August (down 0.1%) and moderately lower in USD terms (down 2.0%). The AUD continued its downward trajectory in August, before sinking below 70 […]
The latest NAB online retail sales index figures show sales grew in August. In dollar terms, its estimated Australians spent $17.5 billion on online retail in the last year. Growth accelerated for electronic games and toys which leads growth, along with media and fashion.
The US ADP employment report last night printed +200k, seemingly confirming that the US economy continues to create more than enough jobs each month to keep the unemployment rate trending down to – and through – the so-called NAIRU rate (below which further labour market strength risks accelerating inflation)
A quieter night overnight, with no large moves, but no strong reversals either. US equities eeked out fractional gains, while Europe was still weak. Yields were a little lower and currencies in G10 for the most part flat. Oil did rise and Glencore, yesterday’s prophet of doom, bounced 17%.
It’s been a combination of factors that have coalesced to weaken the AUD overnight, but it has not been a cathartic move down, just another orderly look under 0.70. There have been weak equity markets in both the Europe and US.
In this weekly update we tease out some implications of slower population growth that’s been evident now for the past two years, with a further step down reported by the Australian Statistician last week.
Friday’s tone was set by Fed Chair Yellen, early in the Sydney session. In this, she backed up the Fed speakers post the FOMC, which have reiterated that the Fed are looking to raise interest rates this year.
Another choppy night of trading with hints of risk-off still dogging equity markets and supporting bond markets, while commodities were non-directional with copper down marginally but other metals mostly rose, including the yellow metal.
It’s been a night of mixed emotions as far as risk sentiment is concerned. It was not helped initially by yesterday’s weaker China manufacturing reading, and the quickly emerging shadow of Volkswagen’s issues.
Innovation is a key driver of business success and a differentiator of high growth-potential segments of the economy. This special report explores business attitudes towards innovation and opportunities.
It’s a bit of pick and mix for explanations regarding market moves in the last 24 hours. There has been no top tier economic data, no new speeches, or surprises.
Not a massive night for price action on the currency markets, but what we did see was signs of a little further strength in the USD.
In this Weekly we have included trip notes and reflections from Ivan Colhoun, Chief Economist, Markets, who has been visiting clients in the UK, Europe and the Middle East.
Not sure this was the reaction the Fed were looking for when they decided to pause and give a shout out to the struggling EM economies and global economic risks.
The time arrived but the Fed couldn’t bring itself to raise rates for the first time since the Financial Crisis. In a hugely anticipated FOMC meeting, the market had priced just over a quarter percent chance of a hike, and just under 50% of economists expected a move, but they remained on hold.
China’s new labour force survey could finally provide unemployment clarity.
Another relatively calm and comfortable session heading into the FOMC meeting. With markets and economists split on the outcome, something will move if the Fed does, or it doesn’t. So enjoy the quiet day today, ahead of tomorrow.
Do It Already is the headline of a Bloomberg article today, but mirrors the sentiment in articles across the press and the discussions on our own floor. Markets are like rabbits in spotlights, uncertain as to which way to shift, just in case there is a move by the Fed.
Chinese economic data has been weak, causing significant weakness in global equity markets In Australia, second quarter economic growth was lack lustre and there was a surprise fall in retail sales, but other measures of economic activity such as building approvals and employment look good.
In the past 12 months Sydney values have increased by 17.6%, Melbourne values by 10.6% with the next best performing capital city being Brisbane seeing a growth in values of 3.9%. The disparity in the top performing growth rates highlights just how diverse the housing market has become post GFC.
There is a flurry of opinions, newsflow, chatter and speculation about the Fed this week, but at the end of the day, there isn’t much that is new to report for markets. Still waiting for the FOMC.
In this weekly, we review the week that was, the week ahead, and NAB’s David de Garis gives his reflections on a recent visit to South Australia.
Short term disruptions add some uncertainty to extent of China’s economic slowdown. China’s 2014 GDP was revised lower in September – with growth down to 7.3% (compared with 7.4% previously) – due to weaker growth in services.
It’s been relatively quiet from Friday and likely to stay that way for a few more days yet. The news flow has been limited and what there has been, has been clouded by one-offs.
The Fed is still likely to start lifting rates this year, but we now expect this to be in December rather than September. The US economy is expected to continue growing at an above trend rate. We now expect growth in both 2015 & 2016 to be 2.5%.
Concerns about the extent of slowing in China, the anticipated rise in the US Fed Funds rate, and sharp declines in commodity prices have generated unease about the impact on emerging markets. Among the major Asian Emerging economies, South Korea and Taiwan, appear stronger than the rest.
Economic activity is shifting back to the eastern seaboard as the economy transitions towards non-mining sources of growth with domestic demand will be strongest in New South Wales and Victoria.
It was the makings of a risk-on mood for markets overnight and a night when the Bank of England’s Monetary Policy Committee (MPC) was hanging tough about the healthy outlook for the UK economy and still harbouring thoughts of a UK rate rise coming into focus in the first part of next year.
The RBNZ has just delivered a universally expected 25-point cut to the OCR (to 2.75%) and says both that some further easing seems likely and that further currency deprecation is appropriate. This takes a bite out of pre-RBNZ NZD strength.
Australian's are feeling less anxious underpinned by lower stress associated with retirement funding, cost of living, job security and health. And for the first time, NAB’s Consumer Anxiety report sheds light on spending behaviours across states.
The pace of growth in the big advanced economies has picked up, mainly reflecting a US recovery from weak first quarter growth. In contrast, Japan and the Euro-zone are not growing strongly and Canada is in recession.
There is increasing evidence that growth momentum is broadening across the the non-mining Australian economy – not limited to the dwelling sector – in response to the lower AUD and interest rates, with improvement particularly evident in services sectors.
Lamb prices follow a generally seasonal pattern, rising early in the year before declining in spring as spring lamb supply becomes available. Nonetheless, monthly average trade lamb prices have remained reasonably steady through July and into August this year and prices are now well ahead of the same time last year.
The global financial markets are breathing a sigh of relief and enjoying the advent of Spring here in the Southern Hemisphere. Happy days: the Fed may wait a little while before raising rates and China seems to have everything sorted.
Business conditions point to a further improvement in the non-mining economy, even as jitters in financial markets weigh on confidence. The conditions index jumped 5 points to +11 in August lifting the trend index to its highest level since late 2009.
NAB’s non-rural commodity price index is expected to fall a further 8% in the September quarter (in US dollar terms) – following an anticipated 7% decline in June.
With the US out for Labour Day and not a lot of economic data elsewhere, it was a relatively quiet night. Market moves were somewhat restrained, awaiting guidance from the upcoming FOMC meeting (next week) and how China’s economy deals with the current uncertainty.
In this Weekly, we are enclosing a recent research piece from our Senior Currency Strategist Emma Lawson on the commodities that are (and which will be) important drivers of the Australian dollar, including the outlook. We also preview local data and RBA speeches for the week ahead.
In the wake Friday’s US employment report that overall could be judged to be consistent with the FOMC’s stated desire to see ‘some further improvement in the labor market’, risk markets took fresh fright.
Diverse opportunities in the non-Central Business District (CBD) office sector mean high net worth investors can invest through pooled/syndicated vehicles or directly. Peter Cashmore, NAB Senior Real Estate Equities Analyst, outlines what investors need to know.
The Euro is weaker this morning and the USD a touch stronger thanks to ECB President Draghi banging the drum about QE, the ECB staff downgrading their Euro-zone growth and inflation forecasts and a pretty comforting slug of US data.
A more measured night. Shanghai finished down smalls yesterday (-0.2%) ahead of a four day long weekend to mark China’s victory in WWII and while European bourses had something of a see-saw night closed higher.
Variability in Australia’s growth outcomes by quarter indicates an economy undergoing significant structural change as it attempts to transition away from mining-investment led growth.
We estimate Australians spent $17.4 billion on online retail in the 12 months to July 2015 which level is equivalent to 7.1% of spending at traditional bricks & mortar retailers excluding cafés, restaurants and takeaway food.
Things aren’t really getting better. The circular theme of markets continues, with equities weakening, weighing on broader risk, weighing on currencies, weighing on equities. And so it goes. While the Fed waits to decide to raise rates, this is not helping the global markets.
Equity markets harboured something of a defensive tone, but the oil market kicked higher again on the little to no fundamental news, signs of a classic short squeeze.
The RBA Board is sure to leave the cash rate at 2% on Tuesday and their Statement is likely to again signal a very modest easing bias. Absolutely no intent, but nonetheless an acknowledgement that if needed they still have 200bps of interest rates to play with.
European and U.S markets on Friday failed to key off the 4.82% rise in the Shanghai Composite, in contrast to Thursday. The proximity to the weekend Jackson Hole talk-fest looks to have been a factor keeping trading subdued.
In the immortal words of Johnny Cash (singing) “I ‘m going to Jackson…” Nope, can’t do it justice, although Ray (MT’s co-author) is definitely having an influence on me. But we do see the central bankers heading to Jackson Hole (JH)
Difficult huh? You thought you knew which direction this was all going? After big moves there can often be big reversals. It doesn’t mean that the underlying issue is resolved but rather is often a factor of positioning, liquidity and uncertainty. We have a jumble of all three going on.
China did what the market was looking for (on Monday) by easing policy, but it appears that the markets want more. Thanks, but we are not quite happy yet.
Feeding off Monday’s 8.5%plunge in the Shanghai index and not much else, US stock markets have just closed with the S&P500 down 3.92%, the NASDAQ -3.81% and the Dow 3.56%. This masks much more extreme intraday volatility and which saw indices down more than 5% earlier in the US session.
The Economist this week carries a topical article on commodities, “Goodbye to all that: a decade of binging on raw materials may leave an even longer hangover”, outlining the pressure on producers now from declining prices.
The NAB Rural Commodities Index continues to rise in AUD terms (up 4.1% in July), supported by a lower dollar and higher beef, fruit, domestic wheat and sugar prices.
The latest NAB property market updates are now available, take a look at the national or your capital city update.
Despite the best efforts of policy makers of late to downplay the significance of the first Fed rate rise relative to what happens after that, global markets remain in the midst of rate rise ructions.
It has been a very eventful night, with US equities ending in a (deep) sea of red with the main indices all off over 2%, bond yields lower and the US dollar weaker across the board led by a rally of more than 1% in the Euro.
Inflation is back in vogue, and (in the US) it is being kept lower by a stronger USD and lower commodity prices.
Direction was taken from the weakness in the Chinese equity market yesterday, as the overnight sessions provided little new news of its own.
News wise, it has actually been quite an eventful night – tragically so in Thailand where a bomb blast in the centre of Bangkok during Monday’s evening rush hour is reported to have killed least 19 people and injured more than 120.
Economic growth strengthened in the June quarter and is set to remain above its long-term trend rate. The Fed is likely to raise rates this year. We expect this to start in September although it could easily be delayed. Subsequent rate hikes will occur at a slow pace by past standards.
The dilemma facing Chinese economic policymakers has been clear since the ruling Communist Party’s “Third Plenum” meeting in late 2013.
Noteworthy developments last week from the RBA, were: (i) the Deputy Governor attribute most of the recent increase in Australian house prices to an increase in land prices; and (ii) Assistant Governor Chris Kent add the composition of recent Australian growth (and possible mismeasurement issues for services growth) to the list of explanations as to why Australian employment and unemployment outcomes had outperformed expectations despite as expected relatively slow GDP growth.
An uneventful end to the week on Friday but one where mild upside surprises in US industrial production and PPI helped deliver slightly higher US treasury yields out to 10 years and a marginally firmer dollar.
More positive signs emerge as NAB’s Commercial Property Index rises for the second consecutive quarter. Encouragingly, sentiment is now positive in all commercial property market segments, but remains very divergent across states.
Further weakness in oil prices, a more settled Chinese renminbi and a solid US July retail sales report caught the market’s attention overnight. News of disruption to the major Chinese port of Tianjin after the explosion Wednesday has not so far affected the outlook for iron ore prices too much.
Global financial markets recovered in July following the debt deal in Greece and stabilisation of the Chinese stock market. Locally, the news is also good – the unemployment rate appears to have peaked while business conditions and confidence have also picked up.
Business confidence rose sharply for ASX 300 firms in the June quarter (back to levels seen elsewhere in the economy) although conditions were broadly unchanged.
Our forecasts for global growth to stay around the 3¼% yoy and locally, our GDP forecasts are marginally stronger than last month – 2.4% in 2014/15, 2.8% in 2015/16 and 3.2% in 2016/17.
It’s getting interesting. And it is likely to remain that way for a little while yet. China’s move to a more market orientated currency is causing volatility and uncertainty and it might take a while until there is clarity.
Markets are a little wary of the implications of China’s devaluation yesterday, combine that with uncertainty around the Fed’s upcoming interest rate hike and mix in Northern Hemisphere summer liquidity and you have a slightly uneasy, conflicting set of market moves overnight.
The Reserve Bank of India (RBI) maintained the Repo rate 7.25%, as expected and the Government and the RBI are broadly in agreement regarding the future composition of the Monetary policy committee. The outlook for the remainder of the monsoon - and it impact on food prices, as well as the impact of the Fed’s anticipated rate rise are two critical determinants of future interest rate movements.
China’s auto industry may be reaching its domestic limit, but is not yet ready to take on the world. The industry has experienced spectacular growth over the last decade – reflecting in part a broader evolution in China’s industrial sector over this period. At a national level, China has lost competitiveness to a range of emerging economies in Asia.
Global growth is running below trend limiting the pace of expansion in commodity demand. Output has been growing faster recently in some of the big advanced economies (notably the US and UK) and the Greek crisis has had little impact on activity across the rest of the Euro-zone.
The business confidence index remains positive, both trading conditions and profitability remain relatively elevated and the trend has held up around average levels. Our GDP forecasts are marginally stronger than last month, with growth of 2.8% in 2015/16 and 3.2% in 2016/17.
With just over a month to go until the Sep 18 FOMC meeting announcement, Fed speakers remain right under the spotlight. Last night we heard from two, Denis Lockhart, Atlanta Fed President and voter and Stanley Fischer, no 2 at the Fed each with their own perspective.
This week we attempt to interpret the latest developments in the large and complex range of conflicting influences impacting on the Australian economy and financial markets. It’s fair to say there is something for everyone in the latest data and policy pronouncements.
The value of education as an export for Australia is set to boom as the country taps into the soaring growth in demand by international students in Asia and beyond.
On Friday the US dollar failed to sustain the gains seen in the immediate aftermath of a US employment report best described as solid but not spectacular. This meant that the AUD finished the week up at 0.7420 having been as low as 0.7260 earlier in the week.
Interest overnight in what the BoE Governor had to say after their meeting and how “hawkish” he might be, focus of course also in their forecasts in the latest quarterly Inflation Report.
Anglo-American pop band Katrina and the Waves - Walking on Sunshine - is 30 years old this year and the rights to the song were sold to Bertelsmann last night for a cool £10mn. The song still generates over £1mn. a year in royalties and endorsements.
Much of yesterday and the overnight sessions were characterised by relatively quiet moves, with bursts of activity.
Oil took centre stage last night with West Texas Intermediate down 3.8% to $45.33/bbl and Brent crude down a cool 5.0% to $49.60, WTI the lowest since March 19 and Brent below $50/bbl for the first time since January when oil selling was at its most intense.
U.S. GDP growth accelerated in the June quarter to a rate of 0.6% qoq (2.3% annualised). Following revisions, the economy is now estimated to have grown in the first quarter.
At -0.1% the latest seasonally adjusted nab online retail sales index shows sales growth was virtually flat in May, a significant slowdown on the 1.6% growth recorded in April. At 0.5%, the trend estimate for online retail sales was unchanged on the previous month.
Event risk aplenty this week with the RBA August Board meeting tomorrow, Friday’s RBA Statement on Monetary Policy (SoMP) and key economy reports. Among those data points, the most market sensitive is tomorrow’s retail sales along with a wider trade deficit.
Most of Friday’s market price action emanated from the US Q2 Employment Cost Index, which at just +0.2% Q/Q (not annualised) was the lowest quarterly change since records began in 1996. The market was looking for +0.6% after +0.7% in Q1.
It appears markets have run out of oomph. We have gone back to typical summer markets, where there is a drifting of trends but not a lot to get your teeth into.
In the June quarter, SME quarterly business conditions and confidence rose rising by 2 points to +4 and +5 index points respectively. SME business conditions were superior in property, finance, business services, wholesale, manufacturing and transport sectors.
Two words, both beginning with ‘so’ - solid and some - marked the FOMC statement out as very subtly more hawkish than its recent predecessors.
Sitting, waiting for the Fed, in summer markets. That pretty much characterises the last day, which was surprising after the angst of the prior period.
Very much a risk-off night for markets with equities and some commodities taking the brunt after Chinese stocks lurched lower in afternoon trade to finish down an eye-glazing 8½% on the day. A year ago, the Shanghai composite was 2,177; yesterday it closed at 3,752.
This week we focus on two important developments from last week. The Governor (and Board’s) conundrum about unemployment rates and the implications for the Australians market.
The economy expanded by 2.2% in 2Q vs 2.5% in 1Q. High frequency indicators point to modest outcomes, particularly in the near term.
After recording gravity-defying price gains in April and May that are largely denominated by correlation with the USD, oil price movements have turned bearish in June and July-to- date.
Price wise, there was not a lot to note in Friday’s offshore markets, much of the day’s price action having occurred during the Asia-Pacific session (in FX at least).
It’s been a night again where the market has not had to be besotted with global geo-politics such as Greece and has been able to focus on the flow of data and more reports out of the US earnings season.
The June quarter NAB Business Survey confirms the trend of gradually improving near-term indicators, but with a somewhat patchy longer term outlook. Business confidence strengthened in Q2 to +4 index points (from 0 points), which is its highest level since Q3 2014…
No doubt RBA Governor Stevens would have a wry grin with the partial pull-back in the USD overnight with the AUD/USD the best performer among the majors popping back above 0.74 overnight and where it sits this morning.
The NAB Rural Commodities Index was steady in June. The neutral result largely reflects higher grain and protein prices offset by sharply lower fruit, vegetable and to a lesser degree sugar prices.
NAB Residential Property Index (of prices and rents) fell slightly in Q2, dragged down by rents. VIC rebounds, but NSW to lead price and rental growth in next 1-2 years with WA lagging.
How Greece and other Euro periphery economies got into trouble and how Greece failed to get out of it.
In what has been an otherwise quiet night bereft on tier-1 economic news, the highlight has arguably been comment from St Louis Fed president James Bullard.
We suspect little flow on for Australian rate pricing from the RBNZ and BoC moves – central banks are responding to their domestic circumstances, and the Australian economy, so far, continues to perform better than expected.
US GDP slowed in the March quarter - extreme winter weather, plunging oil prices, strong $US appreciation and port disruptions all likely factors of influence.
Friday was pretty quiet, in FX especially, after US CPI data failed to surprise, following a slow Asia session where activity was constrained by end-of-Ramadan holidays in Singapore, Malaysia and Indonesia. Gold was one of the biggest movers on the night, -$11.25 to a new 5-year low of $1134.14
Family relationships and safe communities critical to Aussies’ wellbeing. In an effort to better understand why Australians feel the way they do, NAB has been tracking Australia’s wellbeing (as measured by anxiety, life-satisfaction, happiness, and life-worth) since early-2013.
Not big moves on the currency front overnight, though the USD was somewhat stronger as the ECB announced that it had turned on the liquidity spigot for Greece again and what data there was for the US was added a little more incremental evidence the economy is making further progress.
With China’s economic growth remaining stable in Q2, NAB Group Economist Gerard Burg looks at the issue of services being able to maintain their momentum post equity correction.
News wise, nothing bad has happened in or to Australia since we went home last night. Yet the AUD sits almost a full cent lower than where we left it.
We have not changed our forecast for global growth this year (3.2%), but a softer outlook for Japan & India prompted a slight downward revision for 2016 and 2017. NAB forecast on the Global economy is for more of the same this year with global growth staying around 3¼% in 2015, but a softer outlook for Japan & India prompted a slight downward revision for 2016 and 2017. And in Australia, we see the RBA keeping interest rates on hold, with the next move to up – but not till late 2016.
Back to our day jobs, with a reprieve on being political or equity analysts, we can return to the global economy. Markets also chose to ignore the after-party cleaning up in Greece, to focus on central bank speak – both actual and what is to come.
Financial market volatility and the downside risks to global growth have been driven by the Chinese share market correction and the issues in Greece. Locally, lower interest rates and the AUD, strong housing prices and a post Budget kick in confidence appears to have driven better business outcomes.
Business confidence lifted again in the month of June – the highest level since September 2013. Confidence is now positive in all industries except mining and business conditions improved even more, in June – the highest level since last October.
After a truly marathon effort, the EU leaders and Greece reached a deal in the early hours of Monday morning Europe time. Another bailout, but with no debt haircut.
After a drawn out sequence of EuroGroup, EU Leaders and side meetings through last week, the EU Leaders have been meeting overnight in another drawn out and, at times, acrimonious attempt to put together a deal that would result in a third bailout package and keep Greece in the Euro.
Financial markets remain focussed on a Greek exit from the Eurozone, wild gyrations on the Chinese equity market and further hints about a rise in US interest rates. Locally, markets are concerned about falling commodity prices and strong property prices.
According to the Guardian’s European correspondent, ‘extensive mental waterboarding’ is how one official described the rough ride being given to Greek PM Alex Tsipras by EU President Donald Tusk, German chancellor Merkel and French President Françoise Hollande.
“New Greek proposals received by Europgroup president Jeroen Dijsselbloem, important for institutions to consider these in their assessment”. So tweets Dijsselbloem’s spokesman Michel Reins.
While being glued to the long running soap opera of the Greek debt situation, there is another, more mini-series like, show going on in the East. And like Netflix versus NBC (who shows Days of our Lives) it has crept up and has captured everyone’s attention.
Markets were disappointed by the lack of progress in Greece overnight; albeit they should be used to that by now. It did lead to a big drop in European yields and equity market, EUR also underperformed for much of the day.
Opening the capital account will further internationalise the Yuan and monetary policy. This report is the second of two looking into capital account liberalisation in China. This report looks at the international implications of this reform.
Naturally, in the aftermath of the Greece referendum on the bailout producing such a decisive “no” vote to European creditor bailout terms, that was always going to be the main talk across news and wire services overnight.
In this special edition podcast, Peter Jolly, NAB Global Head of Research, and Peter Hartley, NAB Business Markets - Foreign Exchange, discuss the latest developments in the Greece referendum fallout.
This week we look at: the Greek vote; recent developments in Chinese equity markets; the RBA’s July Board meeting; and upcoming important Australian labour market releases for June, with ANZ and SEEK job ads released this week and the monthly ABS labour market data on Thursday.
Ahead of Sunday’s referendum, that is now in process of delivering a decisive ‘No’ vote (to the terms and conditions under which Greece’s creditors would have extended the now-expired second bailout).
An overall disappointing US payrolls report, the ‘lowlight’ of which was an unexpectedly flat monthly read on average hourly earnings and which, together with a 0.1% downward revision to May, served to pull annual earnings growth down to 2.0% from 2.3%.
Online sales fell 0.1 per cent in May 2015 and all categories except Daily Deals (-26.2% yoy) and Personal and Recreational good (-0.6 yoy) recorded growth in May.
There were no signs of global growth accelerating in early 2015. Weak GDP results in the US, UK and Canada outweighed a pick-up in Japan and the Euro-zone and commodity prices have been mixed, partly in response to USD movements.
om Petty’s 1989 classic is appropriately recast as an “Ode to Alex” (Tsipras) after the Greek Prime Minister says he won’t back down on his referendum decision and that both he and Finance Minister Yanis Varoufakis confirmed they are campaigning for a ‘No’ vote in Sunday’s poll.
Greece has officially missed its payment to the IMF, but markets are seemingly unconcerned. We have passed that mattering for now.
We expected this week to be one of fast moving events, and that’s how it’s playing out. Greek PM Alex Tsipras has been speaking saying that he will do whatever he can to protect the Greek people
This week we cover the weekend’s events in Greece and China along with impressions from Asian investors following a two-week trip marketing Australia through Singapore, Hong Kong, Tokyo and China.
Well, we didn’t see that coming, neither did the Institutions (nee Troika), nor the markets. Greece has pulled the negotiations plug at the last minute and put the deal to a national referendum (5 July) AFTER the deadline for payment (1 July).
If you had come in this morning, looked at the news released on the US economy overnight and how the US bond and equity markets had traded, you would not be surprised at all with the prices on the screen this morning, irrespective of what has and has not been going on as far as Greece is concerned.
Consumer anxiety rose despite falling concerns over government policy post the federal budget. More consumers are paying off debt and spending more on “essentials” however, fewer consumers cut back their spending on “non-essentials”.
11 days of 11th hour negotiations: It sure feels like it. It’s still Greek news setting the pace for the market.
All is well, solved, sorted; just not signed. Markets are pretty content with the idea that Greece and its creditors will do a deal before the June 30 deadline. And the Fed will hike in September, and China can avoid an equity market accident.
Except he never came. We wait, there is a vast amount of commentary and expectation, and even a fair degree of optimism. And nothing might happen for a few days at least. But in this case, there will be an endpoint.
Here we are again, still writing about Greece. Will a deal be put together that is acceptable to Greece and its creditors? Greece is asking for debt relief, Europe asking for further economic reforms to pensions and taxation. The 11th hour for Greece is approaching, yet again.
Not much happened Friday amid an absence of US data and with no significant developments - at least not in public view - ahead of Monday’s all-important EU Summit.
A fairly big slug of US economic data last night – admittedly not all of its top drawer – collectively added up to progress, on the real economy at least, towards the commencement of Fed tightening in coming months.
The past decade has seen remarkable growth in the trading relationship between India and Australia, with two-way trade in goods and services reaching $14.8 billion in financial year 2013-14.
The FOMC meeting was a bit of a mark-to-reality exercise for markets, after perhaps getting a little ahead of itself. This applies both to the intra-day moves and the direction over recent weeks.
There is a nervous tinge to the commentary overnight, but market moves have been relatively light, and the same is expected for today. Equities are modestly higher in the US and Europe, yields are lower generally, while the USD outperformed.
An open capital account will end financial repression but still a slow path to reform. This report is the first of two looking into capital account liberalisation in China. This report looks at the domestic implications of this reform.
China’s partial economic indicators broadly stable in May, but weak enough for the People’s Bank of China (PBoC). In June, PBoC cut their economic growth forecast for 2015 from 7.1% to 7.0%. For now, our economic forecasts remain unchanged.
Given the news that greeted the incoming Asia-Pacific market on Monday morning – that talks between Greece and her creditors in Brussels on Sunday had collapsed after just 45 minutes
The NAB Rural Commodities Index rebounded in May – up 4.2% in AUD terms and 3.4% in USD terms. The improvement comes off the back of higher beef, lamb, wool, fruit, vegetables and pulses prices, offsetting further declines in dairy.
The market is focussed on the next steps after the breakdown in talks between Greece and its European creditors overnight and Thursday’s Federal Open Market Committee releasing its latest forecasts and views on Thursday morning our time.
After markets last week ended with a whimper rather than a bang, things have already heated up this morning with news on Sunday evening from Brussels that the latest talks aimed at bridging the differences between Greece and her creditors have collapsed.
NAB Global Co-Head of FX Strategy, Ray Attrill shares a market update for the week ending 12 June 2015
Oil prices rebounded sharply in April and May, benefiting from a confluence of factors: a stall in the USD rally, signs of slowing inventory build-up in the US, as well as unabated geopolitical volatility in the Middle East marked by Yemen civil unrests.
It’s been a whippy, but in the event, mostly an up week for the AUD, starting with a better NAB Business Survey for May, disappointing consumer confidence, RBA’s Stevens keeping the rate easing door ajar and yesterday’s strong employment report.
To the evident delight of a section of the offshore hedge fund community, the RBNZ has just delivered on its recently instated easing bias, with a 25-point cut to the OCR to 3.25% and accompanied by a statement that further easing may be appropriate.
The US Federal Reserve expects the US unemployment rate will fall to 5% by year end. Locally, the Reserve Bank of Australia is hoping lower interest rates will translate to a lower Australian dollar which would help the non-mining sectors.
NAB Business Survey for May was a positive start to this week’s data set that culminates in Thursday’s Labour Force report for May.
NAB forecast on the Global economy is for more of the same this year with global growth staying around 3¼% in 2015, followed by a modest upturn in 2016 (largely driven by the US). And in Australia, we see the RBA keeping interest rates on hold, with the next move to up – but not till late 2016.
You’d think it was a quiet night overnight: US equities were flat, European stocks a little down and currencies traded in a very tight range.
The Indian economy expanded by 7.5% over the year to March 2015. Services, followed by Industry, were the best perfromers however agriculture contracted raising concerns about urban-rural divide. Industrial production activity is expected to gain momemtum in the second half of the year and NAB Economics is forecasting a 7.8% expansion in 2015, followed by 8% in 2016.
There was no evidence of an acceleration in the pace of global growth in early 2015. Weak GDP results in the US, UK and Canada outweighed a pick-up in Japan and the Euro-zone and similarly mixed trends among the big emerging economies saw China slowing, India picking up and Brazil still very weak.
The recent Federal Budget and interest rate cut appears to have had a positive impact on business confidence – which moved up significantly in May - from +3 to +7 index points. This is the highest level of confidence since August 2014 and has helped to turn the trend more positive.
The first port of call for some Australian market participants this morning, returning to work after a three day weekend and having just caught up on Friday’s all-important US employment report, might be to their IT department to complain the prices on their screens are all wrong.
April saw a renewed rise in beef and lamb prices, combined with stability across major grains, balanced against lower dairy, fruit and vegetable prices.
NAB's Director & Senior Economist, David de Garis shares a market update for the week ending 5 June 2015
As has been touted in recent days, the IMF confirmed that Greece has asked the IMF to bundle its four June payments into one, delaying therefore the €301mn payment due to the Fund tonight
Well if Mr Draghi says it is so, we’d better get used to it. Bond yields, particularly in Germany, continued their rise yesterday; despite the ECB’s Draghi telling us that they are committed to their QE program.
Australia’s online retail spending increased to $16.9 billion for the year to April 2015, or by 9.6% annually. It now represents around 7.0% of traditional retail spending, excluding cafe's, restaurants and takeaway food.
Big moves overnight, not all of them consistent, but they may have caught out investors positioning for a rise in risk aversion. As news of a possible deal between Greece and its creditors came in, bond yields – led by Germany, rose sharply.
In May, gold prices averaged at around US$1199 per ounce, largely unchanged compared to April. This reduction in volatility has largely been associated with contained macroeconomic volatility, as most major economies continue to be on a path of gradual recovery.
The changing composition of China’s growth model – towards services rather than heavy industry – means it is less commodity intensive than in the past.
Incoming US economic data continues to rule the roost, last night’s batch encompassing the manufacturing ISM (strong), construction spending (very strong) personal income (strong), spending (weak) and the personal consumption deflators (weak).
A big week with Q1 Australian GDP, the RBA’s June Board Meeting and US non-farm payrolls for May at the end of the week. Greece faces a tough three months, with large debt, loan and interest payments due between June and August. In our highlighted article, we focus on different scenarios for Greece and what they mean for the EUR and AUD.
Post-farmgate conditions were lower than expected despite the March and June quarters generally being seasonally the weakest quarters in the NAB Post-farmgate Agribusiness Survey.The weakness in the results likely reflects mixed climatic conditions.
US revised Q1 GDP came in at -0.7% so not quite as weak as the -0.9% expected (and note any upward revision from a review of seasonal adjustment methodology will not arrive until the Q2 estimate is first released in late July).
Greece news and chatter continues to permeate markets as Greece gets closer to the first payment to the IMF due June 5. Reports of continued losses at Greek banks and deposit outflows continues to weigh on sentiment as liquidity remains at a premium.
Dr Ben Bernanke, former Chairman of the US Federal Reserve, discussed his experience of the global financial crisis (GFC), his views on global growth, the stability of the financial system and where critical economies like China are heading.
Something of a risk-on night for equities and bonds with Greek PM Tsipras saying that a solution was “close” seemingly supporting investor sentiment.
Seemingly there were many “light bulb” moments overnight, when competing ideas, that have been around awhile, suddenly gain traction and markets run with them.
Japan's unemployment rate has fallen, it's weak currency benefited its Current account and led to a surge in the stock market and Japanese banks are stable, well-capitalised and moderately profitable.
Tick tock, tick tock – that’s both the sound of time passing on one of the quietest days in the markets but also that of the countdown to Greece needing to come to an agreement with its creditors.
2015-16 Capex expectations an important element in the investment outlook
If US April core CPI had printed just .007% lower than the 0.256% it actually did, it would have been rounded down to 0.2% on the month not up to 0.3%, and arguably most of Friday's market price action wouldn't have occurred.
The Euro-zone preliminary PMI readings for May hit the screens early in the European session, revealing something of a net recovery for the Euro-zone, the manufacturing index up to 52.3 from 52.0.
It’s the week of central bank meeting minutes. After Tuesday’s RBA Minutes (and Lowe’s speech Monday) reminded the market the absence of a bias in no way restricts their policy options.
The ECB reminded markets that they were still there and still implementing QE. That allowed for a rally in European stocks and led to underperformance by the EUR.
Giving to charity grew by 2% over the year to February 2015. Growth slowed in most age groups and in all regions. Despite these challenges, the average donation size for all charities increased by $2 over the past year to $336 per donor.
They might not exactly be skipping across Martin Place to work this morning, but there should be at least a small smile on the faces of RBA Board members that the Aussie dollar is trading back on a ‘7’ handle, following a night during which the US dollar had been bid across the board.
This week we look at the 4.9% rise in SEEK new job advertisements recorded in April; and two important aspects of the Australian Budget – the likely impact on confidence; and the continued reliance of the Budget forecasts on a recovery in revenues.
Friday was a case of another day, another set of disappointing US economic release. The latest was a trifecta encompassing industrial production and the Empire Manufacturing survey.
Incentivising small business to grow is part of creating confidence and that’s good news for the economy. Hear from our panel of experts as they discuss the 2015 Federal Budget and the impact it will have on business and the economy.
NAB Global Co-Head of FX Strategy, Ray Attrill, shares a market update for the week ending 15 May 2015
After Wednesday night’s excitement, there was a collective deep breath overnight, with some of the preceding moves reversed. There was little newsflow but what there was allowed for some relaxation of the prior day’s anxiety.
Positive signs emerge as NAB’s Commercial Property Index climbs to a 4-year high with a notable pick up in confidence among property developers.
Stephen Southon, Chief Tax Officer NAB, provides an overview of the tax changes announced in the 2015 Federal Budget and how they will impact businesses and families.
Cindy Batchelor, Executive General Manager, NAB Business outlines the key positives for Small Businesses following the 2015 Federal Budget.
Alan Oster discusses the impact the budget will have on consumer sentiment and business confidence, benefits for Small Business and key Agribusiness outcomes.
Currencies are really where it's at this morning, with the US dollar smartly lower across the board and with losses led by the Aussie and Kiwi dollars.
China’s share market emerges as a key economic risk in early 2015, as industry remains weak.
Roads are the major focus within the infrastructure segment taking a 95% share of commonwealth grants over the next five years.
This year’s Budget is a great start for small business where the focus is on driving confidence by reinvesting in businesses.
Tom Elliott shares his views on the 2015 Federal Budget.
The Budget proposed some important reforms to business taxation and paid parental leave.
Childcare will enjoy the benefits of the Budget spend on education.
Overall government expenditure is expected to increase with funds going to the Medical Research Future Fund.
Building confidence and providing support through expanded investment for the agricultural industry.
The Government is seeking to lift the level of small business investment, with a view to generating new jobs and greater economic activity in this year’s budget.
Gemma Dale from NAB Trade shares her 2015 Federal Budget summary focusing on what it means for investors, small business and the economy.
NAB Group Chief Economist Alan Oster provides a comprehensive analysis of the 2015 Federal Budget. The report outlines the key budget measures and explains the economic and fiscal outlook as a result of last night’s announcement.
Alan Oster, Group Chief Economist NAB, provides a summary of the impact the budget will have on everyday Australians, business confidence and what he believes it will do for the Australian economy.
Increasing productivity is one of China’s most critical challenges over the next few decades and education is a key factor in raising the average level of productivity.
Lacking fresh data or major events, it’s been a relatively subdued offshore trading session where with a couple of currency exceptions
The US economy recorded slower jobs growth in April while GDP growth slowed to a crawl. This means the US Federal Reserve may delay raising interest rates until September. In Australia, jobs growth was higher than expected while core inflation sits comfortably in the middle of the Reserve Bank’s target range.
This week we look at the latest US payrolls data, the Australian Budget and how some of the main monthly economic indicators suggest the transition in the Australian economy from mining investment led growth to non-mining growth is progressing.
Business confidence was unchanged in April. Until confidence lifts significantly it is difficult to see a sustained economic recovery developing – to date rate cuts have not appeared to do much and it will be interesting to see what this week’s Federal Budget will do.
The April US employment report proved to be a ‘Goldilocks’ affair for markets, not strong enough to detract from the view a first Fed tightening probably won’t happen at least before September
If you pull an elastic band hard enough, it will snap back and might hurt. It seems we are getting that in yields, but we know that the band runs out of energy at some point.
ASX 300 business confidence fell further in Q1 2015 to remain well below the general economy. Sentiment is particularly weak among very large construction firms. Business conditions while still positive also fell, with trading, profitability and employment all lower.
NAB’s Senior Economist, David De Garis gives his views on what to expect from Tuesday’s Federal Budget.
NAB’s David Bannatyne talks about what the small business sector is looking for from Tuesday’s Federal Budget.
We are likely in for an interesting debate ahead: Central banks lower policy accommodation to astonishing levels and then suggest that markets might be a touch expensive.
As the Federal Budget gets closer, small business owners often ask what they need to know and how they can get prepared.
It’s been a very eventful past two sessions for the AUD that sits atop the major FX leader board, trading at 0.7935 in early trade this morning. The reaction of the AUD immediately after the RBA statement said it all.
NAB Group Chief Economist, Alan Oster previews the Federal Budget 2015
The latest NAB online retail sales index shows sales experienced growth of 0.8% in March, seasonally adjusted. At 0.3%, the trend estimate for Online retail sales slowed relative to February, but remained positive. We estimate that online sales are now 8.0% higher compared to a year ago.
A night of recent ranges as far as the major currencies was the order of the overnight session, the AUD/USD marking time ahead of the RBA decision today at 2.30pm. As background to the $A, iron ore spot prices pulled back again yesterday by $0.95 to $56.18, gold rose 1.13% and LME copper by 1.0%.
Ahead of next week’s Commonwealth Budget, there has been speculation on whether Australia’s AAA sovereign credit rating is at risk. There are several aspects to consider here. First the likelihood and second the implications.
The US Treasury bond yield back-up continued on Friday, but this time not led by Europe, where the 10yr Bund yield was up just 0.7bp to 0.373% in a holiday thinned European May Day .
Today is a holiday in much of Asia and Europe (Happy May Day) but that doesn’t stop the dataflow.
U.S. GDP growth slowed to a crawl in the March quarter. Details were weak, with the major support for growth coming from inventories. We expect the slowdown will be temporary and above trend growth to resume.
SMEs’ quarterly business conditions remained largely stable in the first quarter of 2015, with firms from all tiers showing broadly similar conditions from the previous quarter. SME trading and profitability conditions have deteriorated, offset by improved employment conditions overall.
The FOMC statement issued earlier this morning has made it clear that there is no pre-determined timeline for Fed rate lift-off.
The overnight session was one of US$ weakness and $A strength, trades that gathered momentum early in the London session, a session marked by a big miss on US consumer confidence.
Eurozone markets have been cheered by reports that Greek Finance Minister Yanis Varoufakis has been removed from the debt-deal negotiation table by his prime minister. Varoufakis’ hard-ball tactics have been a source of huge frustration for the Brussels group of international creditors.
Almost without irony, we have to report that Friday’s US durable goods orders report was sufficiently weak to power US stock indices to new record highs, such was the ‘zero for longer’ interpretation of the data. Not the better than expected +4% headline read-out, but the core numbers for capital goods that exclude both (exceptionally strong) Boeing aircraft orders and also relatively strong auto orders.
It was a case of softer than expected readings on both sides of the Atlantic overnight, but in the wash up, the market was inclined to give more credence to the softer suite of US economy reports than for Europe’s.
Business confidence dropped back again in the first quarter of 2015, falling even further below the long run average level. This is consistent with a pull back in confidence in the February monthly survey, although this was completely unwound in March.
AUD/NZD parity party celebrations will just have to be put back into the cupboard for now, courtesy of yesterday’s higher than expected AU CPI, headline and underlying inflation higher by up to a tenth.
Watching the horrific wind and rain maps of the Sydney area must have seen many planes circling and hoping to land or simply stuck on the tarmac. Markets were also in a holding pattern overnight.
The NAB Rural Commodities Index, which covers 28 agricultural commodities, fell 1.7% (AUD) and 3.3% (USD) in March, led by lower beef, lamb, fruit, vegetable and sugar prices. Partial data for April to date points to a recovery in beef and lamb prices.
NAB’s Residential Property Index rises as stronger house price growth offsets falling rents. Sentiment is up in all states except WA which remains deeply negative. Foreign buyers are more active in NSW (1 in 5 new sales) and are now at similar levels to Victoria.
Glenn Stevens spoke last night, and some of his words clearly resonated in FX market if less so in interest rate markets.
That is a key question for investors seeking to work out whether the RBA will ease again at the May Board meeting and furthermore whether the market is correct in pricing nearly two full interest rate cuts by February 2016
China’s economy expanded by 7.0% in Q1 2015, down from 7.3% in Q4 2014. This was the weakest rate of growth since March 2009 – when China was at its lowest point during the GFC. Our forecasts are unchanged – with China’s economy to grow by 7.1% in 2015 and 6.9% in 2016.
Global growth remains stuck at a sub-trend pace. After 3.3% in 2014 we now expect only 3.4% in 2015. We have fine tuned but not fundamentally changed our forecasts– 2014/15 2.3% and 3.0% in 2015/16. The non mining sector is still struggling to offset the impact on domestic demand.
Global growth remains stuck at a sub-trend pace. After 3.3% in 2014 we now expect only 3.4% in 2015. While the Euro-zone and Japan are experiencing upturns, recent US data has disappointed. We have delayed the Fed starting till September (or later) and reduced US GDP in 2015 to 2.7%.
There were some tentative signs of improvement in the NAB Monthly Business Survey for March – with the post RBA cut fall in confidence reversed in March. Surprisingly, the lift was particularly pronounced in mining, although confidence is still lowest for this industry.
The US Federal Reserve has given itself the flexibility to raise interest rates from June, responding to record jobs growth. Meanwhile in Australia, consumer and business confidence has eased back in the most recent surveys, despite the recent interest rate cut.
Two big pieces of Australian data this week ahead of next week’s RBA Minutes and the Q1 CPI
The RBI held the benchmark Repo rate at 7.5% in its April Meeting which was largely anticipated, given the previously ‘front-loaded’ rate cuts in January and March. The RBI highlighted recent unseasonal rains had generated uncertainty and banks had not passed on the previous rate cuts.
Economy has got off to a slow start in 2015. While we expect it to be a temporary slowdown, we have revised our 2015 forecast to 2.7% (previously 3.1%). If achieved, this would still represent an above trend rate of growth, and is consistent with further labour market improvement.
NAB Director & Senior Economist, David de Garis, shares a market update for the week ending 2 April 2015
China’s rapid industrialisation over the past few decades has provided considerable economic benefit for Australia – as a strong increase in trade and investment has increased the integration between the two countries, even before the recently negotiated free trade agreement.
Online retail experienced strong growth in February, with sales growing 1.7% compared to January (0.3%). This month’s NORSI trend growth result is much faster than that recorded in February 2014 (0.2%). We estimate that online sales are now 8.7% higher compared to a year ago.
The divergence between mining and non-mining state economies continues, although with mining investment now winding down it is the major non-mining economies that are starting to outperform. Budget positions improving but focus remains on reducing expenditure.
Consumer anxiety rises again in Q1’15 after a short-lived improvement in the previous quarter, as concern over government policy overtakes cost of living as the single biggest cause of consumer stress. With overall anxiety increasing, consumers are cutting back on many “non-essentials”.
NAB’s Australian economy forecast of 2.9% GDP growth over the course of 2015, picking up to 3.3% growth through 2016 encompasses 11.2% growth in dwelling investment through this year, and 6.9% forecast through 2016.
Julie Bishop launched the 2014 Australia-China Trade Report. Commissioned by the Australia China Business Council (ACBC), one of Australia’s most respected China engagement forums and sponsored by NAB, the report examines bilateral trade between the two countries.
The December quarter 2014 saw a rebound in post-farmgate agribusiness conditions, confidence and expected conditions at both 3 and 12 months. However forward orders declined and profitability remained negative. Overall, the sector experienced a more optimistic December quarter.
This week we look at: •The latest US FOMC statement and its implications; •The RBA Minutes, which reveal the Bank considered further reducing rates in March, but decided against moving at that meeting. How much longer might they be patient?; •The latest industry employment data to see how this fits with our view of the Australian economy; and •The main events coming up this week.
In early February 2015, the People’s Bank of China (PBoC) cut the Reserve Requirement Ratio by 50 basis points. This was the first broad based cut to the RRR since May 2012 and it could release around RMB 612 billion in liquidity. The PBoC was quick to downplay the significance of this change.
The Rural Commodities Index, which covers 28 agricultural commodities, gained 2.1% (AUD) and 0.5% (USD) in February on the back of higher fruit, dairy, fibre and pulses prices, which offset mixed performance across grains and protein.
Partial data have been soft recently, perhaps partly reflecting severe weather conditions. With December quarter 2014 GDP also revised down, we have lowered our forecast for 2015 GDP growth to a still solid 3.1% (was 3.3%). Unemployment continues to fall.
We preview this week’s Federal Open Market Committee meeting and look to tomorrow’s RBA March Board Minutes. The focus will be on the Committee’s forward guidance and forecasts, and whether they can still be “patient” before beginning to normalise the stance of monetary policy.
The annual meeting of China’s parliament commenced in early March. From an economic perspective, the key announcement was the lowered growth target – to ‘about 7%’ from ‘about 7.5%’ in 2014. Our forecasts remain unchanged – at 7.1% in 2015 and 6.9% in 2016
A February interest rate cut and a strong company reporting season buoyed the Australian share market while overseas, resolution of Greek debt negotiations and continuing monetary stimulus, benefited developed global markets.
Global growth remains around 3%. Weaker prices for oil and other commodities will benefit spending power in most big advanced economies as well as in China. The domestic economy, in early 2015, has not gained momentum with another rate cut expected in the coming months.
Finance Minister Arun Jaitley released his first full-year Budget on the 28th of February, 2015. The pace of fiscal consolidation was pushed back, with the 3% Deficit target now likely. Instead, there was a strong push for infrastructure spending.
Global growth remains around 3% and, although the business surveys show a lift in sentiment in key advanced economies, there is still no clear evidence that the expected upturn in global growth to 3½% by the end of the year has commenced. Locally, we have not changed near term forecasts
The RBA’s 25bp cut to interest rates in February did not appear to have the desired effect on firms ‘animal spirits’, with confidence actually deteriorating in the month. The index is now at its lowest level since before the Federal election in 2013 and is well below the long run average.
NAB Director & Senior Economist, David de Garis, shares a market update for the week ending 6 March 2015.
Covers the implications of Friday’s stronger-than-expected US non-farm payrolls, previews important Australian Labour Market data and reports on increasing anecdotes that the lower $A is beginning to boost the domestic economy through onshoring.
Australia’s online retail spending increased to $16.6 billion for the year to January 2015, or by 9% annually. It now represents around 6.9% of traditional retail spending.
Forecast production across summer crops remains divergent. Cotton is likely to see a significant fall in price year on year, as changes to Chinese subsidy arrangements and cheaper synthetic fibres eat into demand, outweighing the impact of reduced Australian supply.
A huge week is in prospect as markets await the RBA board’s March deliberations on Tuesday with keen interest.
Big business in Australia is losing confidence, affecting medium-term growth and capital expenditure plans. Overall confidence among larger firms has now fallen below its long-term average and is weaker than for smaller companies and the broader economy.
The RBA may be right to suggest that a lower AUD would promote more balanced growth, but its claim that the AUD remains overvalued rings hollow.
Due to the Chinese New Year holiday period, there are limited partial economic indicators for January each year. That said, the data available points to a soft start – PMI measures are weak, imports slowed, inflation continues to soften and credit growth contracted.
After reaching the highest levels since 2009 in the September quarter, SMEs’ quarterly business conditions fell in the December quarter for the first time since Q4 2013. Firms from all tiers: low/micro, mid and high, showed consistent declines in their overall business conditions.
The US Private Placement market offers a rich source of long-term funds for a wide range of Australian corporates. Our latest survey reveals the key factors that influence US investor buying decisions and their expectations for 2015.
If there was any take away from last week’s January labour force report it was that a gradual trend rise in Australia’s unemployment rate remains in place. And this is despite some modest increase in the underlying pace of new job creation.
Following two strong quarters, US GDP growth decelerated in the December quarter to a still solid 2.6% qoq (annualised). The large fall in oil prices and the rise in the dollar are producing both winners and losers. Annual labour force growth in January matched civilian population growth.
2015 brings an expanded Rural Commodities Index, which now includes 28 commodities, up from eight. The Index increased 5.6% in January in AUD terms, as sharply higher beef prices - and to a lesser extent higher lamb, dairy and vegetable prices - offset mixed performance across grains.
Based on adjusted World Steel data, global steel production rose by 3.5% in 2014 to total 1.64 billion tonnes. Prices for metallurgical coal have remained comparatively stable since March 2014. Spot prices for thermal coal have continued to drift lower.
Moderate sub-trend global growth continues with a diversity of economic conditions. This has been reflected in lower prices for a number of industrial commodities. Falling oil prices should boost global activity, although the impact varies between oil exporting and importing countries.
The Ukraine and Russia agree overnight on a ceasefire accord to take effect from this Sunday in a marathon meeting in Minsk, Belarus between PM Poroshenko, Putin, Merkel and Hollande.
Government funding for new infrastructure in the higher education sector has recently dried up. As a result, a number of universities are accessing capital markets and bank loans for their infrastructure financing needs – in turn offering significant opportunities for debt providers.
In 2014, China’s crude oil imports came to US$228 billion – accounting for almost 19% of the country’s total imports by value and around 2.5% of total GDP. Sustained lower oil prices will therefore reduce China’s financial outflows, providing a significant boost to the economy.
Sentiment in commercial property markets softened in Q4 after September’s promising gains. Retail sentiment (and to a lesser extent industrial) buck the trend, offset by falls in CBD hotels and office. Forward indicators are painting a mixed picture of the market.
Global equity prices in developed markets lost 0.5% in January, with strong gains in Europe offset by weakness in the United States. Australian shares rose 3.3% while the Australian dollar fell four cents to US$0.78, against a strengthening US Dollar.
The latest survey shows that business confidence edged up a little, but it's still below long run averages. Confidence remains very weak in mining, consistent with lower commodity prices, but multi-year lows for the AUD likely contributed to a considerable improvement from last month.
The week opens with two conflicting pieces of economic news for markets, the strong US payrolls report and weak China trade data. NAB has also revised lower its $A forecasts. Friday’s US non-farm payrolls report for January surprised on the high side.
After the drastic falls towards the end of 2014, oil indexes started to exhibit some tentative signs of stabilisation since mid-January. Prices traded mainly around mid to high USD40s a barrel in the second half of the month, before breaking above USD50s in the first week of February.
The RBA’s Board has made the decision to reduce rates earlier than NAB expected, but for similar reasons we expected a modest rate reduction in March. It suggests growth will be below trend for somewhat longer – and the unemployment rate will peak a little higher – than earlier expected.
Business confidence eased back in Q4, dropping below the long run average level. Sentiment and business conditions are generally consistent with a ‘patchwork’ economy. Outside of construction and services, conditions remain soft in all other industries.
Online retail experienced a modest growth in December, with sales growing 0.1% compared to November (-0.3%), and 8.9% higher compared to a year ago. In dollar terms, we estimate Australians spent $16.4 billion on online retail in the 12 months to December 2014.
U.S. GDP growth decelerated in the December quarter to a still solid 0.65% qoq (2.6% on an annualised basis). This suggests that the economy is growing at an above long-term trend rate. As a result, unutilised capacity in the economy continues to decline.
Another big week coming up, with the RBA’s first Board meeting of the year tomorrow, the much-awaited retail sales reading for December on Thursday, the RBA’s February Statement of Monetary Policy on Friday and US non-farm payrolls data for January on Friday night.
Combined with strong industry fundamentals, Queensland saw significant rainfall during December 2014 and January 2015. In response, cattle prices have risen substantially as producers look to restock. However, despite this optimism, a number of challenges remain.
NAB has released its first annual pulse check on the big issues facing Australia today. Important concerns include cost of living, access to healthcare, employment, the economy and terrorism/security concerns, while indigenous issues, infrastructure and transport and taxation are lowest.
The NAB Australian Wellbeing Index fell slightly to 63 points in Q4 2014 (63.8 in Q3). Wellbeing was rated lower for all questions, especially “not anxious yesterday” which fell to its lowest level since the survey started. Wellbeing rated highest in Queensland and lowest in Victoria.
Since 2008, global quinoa consumption has rapidly increased. In Australia, planting has been concentrated largely in Western Australia. While there are potential benefits from diversification for wheat producers, concerns remain around reliability of yield, weed control and marketing.
The USD Index is little changed, but yields are marginally lower after the Fed issued a post meeting Statement repeating it can be “patient” in beginning to normalise monetary policy.
Moderate sub-trend global growth continues with a diversity of economic conditions (expansion in US, UK, India and China, weakness in Euro-zone, Japan, Latin America). Falling oil prices should boost global activity, although the impact varies between oil exporting and importing countries.
The USD stands lower this morning against all G10 currencies, on the back of remarkably weak US durable goods orders. The EUR was a key beneficiary, up as much as 1.6% for the day, before paring those gains to sit at 1.1360.
Moderate sub-trend global growth continues with a diversity of economic conditions. Falling oil prices should boost global activity, although the impact varies between oil exporting and importing countries. Unemployment to continue to deteriorate but peak lower (6.6%) and later (Q4 2015).
The survey again shows a patchwork economy with little-to-no momentum building. In December, conditions eased for the second successive month after October’s surprisingly strong result so they're now a touch below the long run average.
The US$ ended last week on a strong note and started the week with more momentum, aided by further Euro weakness. The Greek election has come and gone with anti-austerity Syriza Party winning the largest number of seats with its young leader Alexis Tsipras the winner.
2015 could be a very good year for agribusiness, with easier access to Asian markets and favourable economic conditions. Five of NAB’s leading commentators take a close look at the opportunities and share their tips on how to make the most of them.
Our central expectation going in to the ECB meeting was that President Draghi would try to exceed expectations. He is a past master of this, very skilled at manipulating opinion and then over-delivering
The Bank of Canada is the latest Central Bank to deliver a shock; cutting its main policy rate to 0.75% from 1.0% in a move which none of the 22 analysts surveyed had anticipated.
NAB Residential Property Index falls as house price expectations pared back and rents weaken. Sentiment softer in all states (and still deeply negative in WA). Almost 10% of all property is being purchased by first home buyers as an “investment”.
There’s a clear trend developing in global equity markets where expectations for monetary stimulus in Europe (ex-Switzerland of course!) are driving stocks higher whilst the prospect, or possibility, of Fed tightening combined with worries over corporate earnings are depressing
China’s economy continues on its gradual transition, away from a manufacturing hub towards a modern, consumption based economy. One signal of this trend is the increasing share of China’s services sector (tertiary industries), averaging 48% of GDP in 2014 (up from 47% in 2013).
For the first time in well over a week, almost every currency is trading on the same big figure as it did 24 hours ago; the one exception being EUR/USD but even this is only 60 pips from where it opened Monday morning.
Nothing could be clearer than the current economic and policy divide than between the US and Europe. As the Fed ponders rate lift-off and US consumer sentiment hits its highest level for 11 years, the ECB last week has been putting together a QE plan that will get some sort of approval from Germany.
The US economy is currently enjoying a strong patch of growth. Small business confidence is at a recovery high, consumer confidence continues to increase, and household incomes - already benefiting from strong employment growth - are being further boosted by the fall in oil prices.
The big news overnight was the completely unexpected Swiss National Bank abandoning its EUR/CHF 1.20 floor it’s been defending since September 2011. As recently as last week, the 1.20 floor was described by SNB President Thomas Jordan as “absolutely central” in light of negative inflation.
In October 2014, the International Monetary Fund (IMF) announced that China had overtaken the United States to become the world’s largest economy. This was the first time since 1872 that the US was not considered the world’s largest economy, when it overtook the United Kingdom.
There’s been some more significant price action in commodities to report from the past 24 hours. At lunchtime yesterday Asian LME metals prices went into free-fall on the back of no apparent news other than playing catch up to what we’ve seen on oil and maybe even the AUD.
Japan is in the midst of major demographic changes, which have had significant implications for its economy and will continue to do so. Japan’s population is already declining, and with its society also ageing the drag on the workforce is potentially even greater.
Oil remains the centre of attention though the further dip not of the same cathartic proportions as the night before but enough it seems to continue to dog equity market sentiment, US energy stocks down another 1.2% with WTI and Brent down 0.4% and 0.8% respectively.
Oil prices have again been the stand out story overnight with Brent now clearly below $50/bbl, having tested below $50 last week, and both WTI and Brent down 5-5½% overnight to below $46 for WTI and currently $46.66 for Brent.
As we headed into the US employment reports, equities, bond yields, and the US Dollar were all modestly drifting lower. On the release, the positive headlines of strong payrolls growth and lower initially saw those shoot higher, before more than fully retracing those moves.
Infrastructure Partnerships Australia estimates that $700 billion of funding is needed over the next decade to finance the long term infrastructure investments – the nation building – we need to secure our future. We look at the building blocks that are falling into place.
The Index fell for the second straight quarter, with lower levels of concern reported across all categories. According to NAB Chief Economist Alan Oster, the cost of living and government policy continue to be the single biggest causes of anxiety for Australians.
Online sales growth slows markedly in November with most categories following suit. Despite the general slowdown, at category level, Electronic Games and Toys maintained recent momentum. In dollar terms, Australians spent approxinately $16.3 billion on online retail.
Risk appetite has continued to improve, with a promise from the Fed to be “patient” in normalising interest rates stoking equities.
This morning, the Fed tried to have its cake and eat it, too, leaving markets slightly confused, if not in outright pain.
As Steve Lambert, EGM Capital Financing, explains, 2014 was the year that opened up new opportunities for customers - from the new funding model for local government to the higher education sector emerging as a new borrower in the market. We review the year in our magazine.
Another wild night in markets, and it is slightly to surprising to see equities post some decent gains. The Euro Stoxx 50 closed 2.3% higher with energy stocks leading the way, with some investors likely on the hunt for bargains in the still-negative risk environment.
Global equity markets extended the October sharp rally through November, while gains were broadly based in Europe, Japan and the United States. Locally, fourth quarter data continues to show improvement in business credit and capital investment from non-mining sectors.
Hard to know where to start this report with extremely whippy and severe movements across asset classes overnight. It was a wild night for all sorts of reasons, not the least being the siege in Sydney’s CBD that was ended in the early hours of this morning with a sad loss of life for some innocent people.
Weekly market update week ending 12 December 2014
Last Friday saw the third annual pre-Xmas interview of the RBA Governor by the Australian Financial Review. The headlines were: "Governor wants an $A at 75cents" and "RBA pushes back on rates cuts".
There is a growing expectation that China’s Central Economic Work Conference will lower China’s economic growth target for 2015 – down from this year’s ‘about 7.5%’ to 7.0% – however this change may not be officially announced until the National People’s Congress meets next March.
There was another step lower in oil prices on Friday night with Brent down another $1.69/bbl to $61.09 and WTI $-2.14 to $57.81. No surprise then that US consumers are rejoicing at the prospect of lower gasoline prices.
GDP growth is expected to strengthen in 2015 to 3.0%, from 2.3% in 2014. This reflects rising business and consumer confidence, improving household balance sheets, a strengthening labour market, solid investment conditions, declines in oil prices and a fading headwind from fiscal policy.
Global growth remained around 3% yoy in Q3, sightly below trend but it is expected to pick-up to 3½% in 2015 and 2016. Major differences in the strength of economic activity persist between regions with the US, India and China accounting for almost 2 ppts of forecast global growth.
In late November, the People’s Bank of China (PBoC) surprised markets with cuts to benchmark interest rates. These changes were the first in over two years – the PBoC had held rates stable since early July 2012.
Last months spike in business conditions was again short-lived, pulling back towards long run average levels in November. Despite the drop, the overall trend is still looking much better than 12-18 months prior, while levels of capacity utilisation have continued to improve.
Recent monthly economic indicators and business surveys show continued moderate global economic growth along with big variations between economies. Low interest rates, falling oil prices and smaller budget cutbacks in big advanced economies underpin faster growth of 3½% in 2015 and 2016.
e week commences against the backdrop of Friday’s stronger-than-expected US non-farm payrolls report for November (which included favourable diffusion indexes and temp help trends signalling ongoing stronger outcomes).
The Indian economy expanded by 5.3% over the year to the September quarter. It's the second successive quarter of above-5% growth, and reflects a gradual upturn in the Indian economy. Financial services and Community services were the best performing sectors.
Australia’s online retail spending increased to $16.19 billion for the year to October 2014, or by 11.9% annually. It now represents around 6.8% of traditional retail spending. The share of domestic spending continues to edge higher, now controlling 75.2% of total online spending.
This report uses our expertise from across a range of industry sectors. In this edition, we present a compilation of articles with the underlying theme on change, and we ask NAB’s Chief Financial Officer for his view of the barriers and challenges for the Australian business landscape.
General Manager of NAB Agribusiness, Khan Horne says the falling Australian dollar is a real boost for agriculture, and combined with the recent announcement of the China–Australia Free Trade Agreement, conditions for 2015 are looking positive for agricultural exporters.
Australian markets weekly starting 24th November 2014
The China-Australia Free Trade Agreement (FTA) offers considerable potential for Australian agricultural and services firms as a result of their improved market access. Dairy, meat and horticulture stand to gain significantly while most resource exports will end up having duty free access.
NAB’s Director of Fixed Income, Mark Todd, is joined by Ken Hyman (Antares) and Francesco De Stradis (Ord Minnett) to discuss the Federal Open Market Committee's decision to lift interest rates and drop GDP forecasts.
Moderate sub-trend growth continues across the emerging market economies of East Asia (S Korea, Thailand, Taiwan, Malaysia, Indonesia, Singapore, HK and Philippines). Growth in the region to increase gradually through the next couple of years.
Twelve months ago, China’s Government announced its reform agenda, following on from the Third Plenum. So far, progress on these reforms has been limited, primarily in social policies such as loosening the Hukou system – which we have argued could go further – and the One Child Policy.
The U.S. economy is growing at an above trend pace, with strong jobs growth. We expect the Fed to start raising rates in mid-2015. While there are signs wages growth is starting to strengthen, low inflation remains the main risk that may delay rate hikes.
Divergent economic conditions around the world are having a net negative impact on commodity prices. Chinese GDP growth slowed to its lowest pace since early 2009, while parts of the economy that are key to industrial commodities remain comparatively weak.
The cooler economic conditions experienced in the third quarter could continue into Q4 and further into 2015, reflecting the continued reluctance of Chinese policy makers to implement broad based stimulus. China’s industrial production growth also slowed slightly in October.
Global growth remains moderate and sub-trend with big variations between key economies. China and North America represent around one-third of global GDP but they currently account for around half of global growth.
Global equity markets staged a sharp turnaround in October. It was led by the US where their Federal Reserve reassured markets that interest rate rises remain data dependent. Meanwhile, there was additional modest improvement seen in Australian business and consumer confidence.
Recent monthly economic indicators and business surveys show continued moderate global economic growth along with big variations between the major economies. Low interest rates, falling oil prices and smaller budget cutbacks in big advanced economies should underpin.
Clearly the most surprising feature of the Survey was the sharp jump in business conditions in October (the largest monthly increase in the history of the survey). The improvement driven by sales and profits was relatively broad based –unlike the (short-lived) jump in July.
China’s third quarter National Accounts showed the economy grew by its slowest rate since March 2009. From a bulk commodity perspective, key parts of China’s economy remain comparatively weak. Industrial production has slowed in recent months.
After several low quarterly increases, we expect Wednesday’s Q3 wage data to show a small up-tick in the annual growth rate from 2.6% yoy to 2.7% in Q3.
The US payrolls report on Friday night was solid, despite the headline increase of 214K in October coming in below the 235K expected. September payrolls were revised up by 8k to 256k and August up by 23k to 203k.
Australians are giving more to charity than ever before, with the average annual donation size for all charities increasing by 3.6 per cent ($11) to $315 per donor. Overall charitable giving growth also continues an upward trend, increasing by 6.4 per cent in the 12 months to August 2014.
GDP grew by 3.5% qoq (annualised rate) in the September quarter, a strong above trend result. While we expect that growth may slow in the December quarter, it should still be consistent with around 3% annualised growth in the second half of 2014.
Online retail showed further encouraging signs of growth in September, to be 1.1% higher compared to August, and 12.8% higher compared to a year ago, the highest rate since March (13.7% YoY).
The latest Post-farmgate Agribusiness Survey shows that while the sector experienced a difficult September quarter, expected conditions for the coming 12 months remain in positive territory at +5.
SME business confidence eased slightly, continuing the trend decline from the peaks seen around last year’s Federal election. While this result is consistent with the ongoing sluggishness of demand in the domestic economy (excluding exports)…
ASX 300 business confidence gained momentum in the September quarter, surpassing the broader economy. Conditions were broadly unchanged - trading and profitability were stronger, however the slight improvement was offset by deteriorating employment…
Overall sentiment in Australian commercial property markets turns positive for the first time since early-2011, but WA continues to weaken. NAB Group Chief Economist Alan Oster said "NAB’s Commercial Property Index rose to +2 points in Q3, its first positive read since March 2011.”
Fairly quiet week for scheduled data and events in Australia but more action overseas, particularly in the US where the Federal Reserve will end their bond buying or quantitative easing programme
Business confidence was unchanged in Q3, remaining close to the long run average levels. However, our monthly survey shows that the momentum has turned, with confidence easing steadily over the quarter.
Credit growth to rise 0.4% in September, with the focus on investor housing. Q3 trade prices to show a further large fall in export prices..
Nearly half of Australians are undecided on whether they will have to sell the family home to fund their retirement, the latest MLC Wealth Sentiment Survey has found. The quarterly survey has found 11% of Australians already plan to sell the family home to fund their retirement…
Recreation & personal services and finance/ property/ business services reported the most positive business conditions. Interest rate sensitive sectors performing well.
China’s latest economic data was a mixed bag – with many measures comparatively negative (against the trends of recent years) but stronger than somewhat pessimistic market expectations. While year-on-year GDP growth was at a five year low, the growth rate remaining above 7% will likely…
The overall price outlook for rural commodities stabilised somewhat in September and early October as a falling AUD blunted the impact of lower global prices.
Q3 CPI to be low. Underlying CPI forecast to rise 0.5% and headline flat. RBA Minutes, Stevens speech and NAB Quarterly Business Survey also next week
Residential electricity prices consist of wholesale, network, environmental policies (such as the Renewable Energy Target), and retail costs and margins. In Q3, wholesale costs were affected by the removal of the carbon tax as well as changes to regulated prices in some States.
NAB Residential Property Index unchanged with stronger house price expectations offset by weaker rental prospects. Sentiment continues to soften in WA (an all time low). Big pick-up in foreign buying activity in new property (especially VIC) and tipped to rise further.
Global growth was around 3% in the first half of 2014, below trend and with marked variations in performance between major economies. North America continues to perform strongly with solid growth in both the US and Canada.
China’s changing healthcare needs require major changes to the system to avoid economic pain. The population is ageing and life expectancy is rising. With these two trends, demand for healthcare services is set to increase – particularly given the growing incidence of non-communicable diseases.
Director, Corporate Debt Markets Origination at NAB, Brad Scott discusses the recent developments in the Market Term Notes (MTN) market, along with the outlook for the rest of the year and the opportunities that are opening up for investors.
Disappointing global growth continued into mid-2014 with GDP expanding by a sub-trend 3% yoy and concern over weakness in Japan and the Euro-zone offsetting solid growth in the US and UK. Chinese forecasts unchanged.
Business confidence lost ground in September –lowest level since pre election - in the face of a persistently soft operating environment for many firms. Forward orders remained soft, prompting de-stocking and competitive pricing which appears to have weighed on profitability.
While the US economy remains robust, Australian shares fell 5.4% as markets digested falling commodity prices, a weaker Aussie dollar and the possible introduction of policy brakes on housing credit, as James Wright, JBWere Chief Investment Officer reports.
A striking feature in recent times has been the divergence between the confidence of businesses and consumers.
NAB Business Confidence and W-MI Consumer Sentiment, NAB Resi Property Survey; RBA’s Debelle speaks twice
The RBI held the policy Repo rate at 8% in its latest meeting – as broadly anticipated. The focus on meeting the 6% headline CPI outcome in January 2016 was reiterated.
Recent global economic data and less favourable supply fundamentals have put downward pressure on many commodity prices. China, Europe and Japan were softer, while the U.S recovery appears to be gaining traction (US GDP grew at its fastest pace since 2011)…
Some quite explosive overnight price action and which has followed directly from the publication of the September FOMC meeting minutes. This has seen US equities jump by almost a percent.
Indicators point to above trend growth in the September quarter of just over 3% qoq. Jobs growth was strong in September and the unemployment rate fell below 6% for the first time in over six years. Inflationary pressures have eased in recent months.
A weekly outlook for Australia, key global economies and markets
What to watch, week commencing 6 October
The NAB Australian Wellbeing Index rose to 63.8 points in Q3 2014 (61.7 in Q2 2014). Wellbeing was rated higher for all measures, with the biggest improvements related to life satisfaction, worthwhile life and happiness.
Since our last Quarterly Oil Market Update in June 2014, global crude oil prices have fallen sharply amid ample supply and weak demand combined with an increasing confidence that turmoil in Iraq is unlikely to disrupt supplies.
Following a recent NAB-hosted roundtable event on Social Impact Investing, The Australian Financial Review today released editorial covering the topic from two journalists who were in attendance, James Dunn and Jonathan Shapiro.
Online retail showed further encouraging signs of growth in August, to be 0.7% higher compared to July, and 8.3% higher compared to a year ago, although slower than July (9% YoY).
House prices have been rising briskly in Australia since late 2011. They continued to do so at the weekend with RP Data showing that prices were up in nearly all the major cities and auction clearance rates robust.
The overall outlook for rural commodities deteriorated in August and September on account of a weak finish to winter rains in many areas combined with forecasts of abundant global grain supplies and lower prices for major agricultural commodities.
“The index shows that Australia’s engagement with Asia is dominated by product imports and not surprisingly, our engagement is clearly strongest with China across all sizes of business. But, it is higher for SMEs than the ASX 300” said Alan Oster.
The juxtaposition of another significant downside Eurozone data surprise (German IFO) and a major upside surprise for US New Home Sales has – unsurprisingly – pushed the EUR below 1.28 against the US dollar for the first time since 10 July 2013.
In their most recent quarterly RBA Bulletin released last week, the RBA published a summary of their business liaison program, how they use that to stay abreast of current business conditions and how it has been invaluable in providing warnings of any sudden changes in the business cycle.
Conditions in China’s real estate sector have slowed considerably across 2014. The sector has been a key contributor to economic growth in recent years and a slowing trend will impose greater pressure on other parts of the economy to provide growth momentum, particularly if the Government aims to maintain its current growth target.
The USD strengthened against all G10 currencies on Friday night, pushing the AUD to a new post-March low of 0.8921, and it has opened up just above that at 0.8935 this morning. The AUD was not helped by a further 1.6% fall in iron ore.
Financial Stability Review, RBA Governor a panellist at the Melbourne Economic Forum and second tier labour market data. Election tomorrow and Trade data next week.
Consumer anxiety moderates after the post budget jump, but some concerns remain elevated. The NAB Consumer Anxiety Index fell to 62.3 points in Q3 (64.5 points in Q2), led by a notable reduction in concern over the ability to fund retirement, cost of living and job security.
Global economic data sent divergent signals to commodity markets in August. China’s outlook gave less comfort in comparison to the better US data. There was more movement in financial markets during the month. Meanwhile further sanctions on Russia were put on hold.
Weaker than expected industrial production data is likely to generate headlines this month. However these results are not as negative as they may seem – reflecting in part the impact of stimulus in Q3 2013.
Business confidence near multi-year highs yet consumer confidence near multi-year lows. Firms profitability being driven by productivity and constrained labour costs. Household income growth near zero over past two years – near recessionary levels.
With better US economic data, global markets were stronger in August. Locally, as James Wright, JBWere Chief Investment Officer explains, company reporting season was positive and stocks rewarded for delivering solid earnings, yields or capital management.
Tensions between the Ukraine and Russia have been less disruptive than a month ago, reducing market volatility and bringing down gold’s risk premium –allowing gold markets to refocus attention on macroeconomic drivers. Reasonably positive economic data out of the US, and some recent…
Having fallen for much of the year, wholesale gas prices in the United States and Europe have begun to edge up slightly since July. With the northern summer now coming to a close, mild weather should keep prices in check until the onset of colder winter conditions sees gas use increase.
Weakness in Japan, stagnation in the Euro-zone and a hard landing in Latin America have resulted in a slowdown in the pace of global growth through the first half of 2014. World GDP growth reached 3.4% yoy in late 2013, it slowed to 3.1% yoy in March qtr 2014 and 2.9% yoy in June qtr.
Indicators remain generally positive, consistent with our forecast of solid, above trend, growth of 3.0% qoq (annualised) in the September quarter. While August’s employment gain (142,000) was below expectations, the recovery in the labour market remains on track.
Disappointing global growth continued into mid-2014 with stagnation in the Euro-zone sparking deflationary concern and ECB action while Japanese demand is still struggling to recover from April’s tax rise.
Business confidence remains resilient despite easing a little in August, supported by positive forward orders, subdued cost pressures and more stable consumer confidence. Positive business conditions are also helping despite falling back in the month.
The European Central Bank has cut its key policy lending rate to only 5 bps, it's progressing its planned schemes for asset purchases and targeted lending to banks and has hinted that it could increase its balance sheet by around €1 Trillion, taking it back to its early 2012 size.
The Government Statistician released the Q2 National Accounts last week which showed the economy doing quite well. Or at least a bit better than we feared given mining investment is slumping and commodity prices are falling.
Australia: Solid employment gain expected on Thursday. NAB Business Survey and Consumer Confidence also released next week. NZ: RBNZ to temper its OCR outlook in Thursday’s Monetary Policy Statement. China: Trade figures, CPI and industrial production.
Australian retail sales rose 0.4% in July, a good result that builds on the 0.6% growth in June. We were expecting a stronger gain but it nevertheless reaffirms that the negative impact from the Federal Budget on retail spending in May was temporary.
The Indian economy expanded by 5.7% in the June quarter, the fastest pace in over 2 years. By sector, Services (Financial & Community services) and Industry were better performing, while Agriculture eased due to weaker monsoon conditions.
RBA Governor Stevens today spoke at a CEDA luncheon in Adelaide. The Governor's speech reinforced expectations that the RBA will remain on hold for some time yet.
After (unrevised) growth of 1.1% in the March quarter, growth of 0.5% in Q2 with the known 0.9% drag from net exports was a more than respectable outcome. Headline growth was a tad above the 0.4% consensus and our own 0.2% call.
Australia’s online retail spending continues to increase following a period of more subdued growth and is now valued at around $15.6 billion for the year to July 2014. This represents annual growth of 8.6%, placing online at around 6.6% of traditional retail spending.
For the 13th consecutive month the RBA has kept the cash rate unchanged at 2.50%. They are still on a neutral bias, and there was no meaningful change to the overall tone of the Statement.
It was particularly quiet overnight, with the US on holidays. The poor European and UK data didn’t worry markets much, which, in the main, were taking a little nap
Blockbuster week in Australia with loads of key economic data, an RBA rate decision tomorrow, and a speech from the RBA Governor on Wednesday.
RBA on hold Tuesday, Stevens speaking and a soft GDP report Wednesday, along with mixed July data: strong retail sales but soft building approvals. Pre-Q2 GDP partials also due Mon/Tues; NAB Online retail index due Wednesday
Australian beef prices are forecast to increase 3.5 per cent in 2014-15 on the back of a 4 per cent fall in production as producers rebuild herds, according to the latest NAB Agribusiness Rural Commodities Wrap.
As part of the current local reporting season last week, we heard that both the Gladstone and Australia Pacific LNG projects are on track and on budget.
What to Watch: Week commencing 25 August 2014
Australia’s Federal system of Government makes State Governments a critical part of the overall fiscal and economic performance of Australia. This handbook is intended to provide a comprehensive update and reference tool on both the economies and fiscal finances for each State.
The RBA’s half-yearly testimony had a somewhat more positive tone without going overboard on growth specifics nor on when a more discernible upturn might arrive. (The Bank’s formal forecasts were of course outlined in their quarterly statement earlier).
Speaking with clients in Adelaide last week, it was something of a surprise that the NAB Business Survey improved further in July, with NAB Business Conditions making some further ground to now be above its long term average.
Key economic insights from this week and the week ahead
Despite US equity markets posting fresh records in July, a late, large fall saw equity markets finish lower. While valuations are stretched, JBWere Chief Investment Officer, James Wright, reports that the US economic recovery should support current earnings forecasts.
Weak retail trade and net exports point to soft GDP growth in Q2. Headwinds remain, but business conditions jumped to four year high, while, business confidence, orders and capacity utilisation all looking better. We have trimmed our global forecasts.
Global growth remains moderate but monthly trade and industrial growth continues to slow. Economic conditions mixed between regions with solid upturns in the UK and US, weakness in Japan and signs of slowing in the Euro-zone. Emerging market economies still driving most global growth
Business confidence again surprised on the upside, supported by better business conditions (largely reflecting sales and profits) and a surge in retailer confidence. Firms still unfazed about the Budget (for now). Conditions jumped to a four year high
The RBI held the policy Repo rate at 8% in its latest meeting – as broadly anticipated. The Statutory Liquidity Rate was cut by 50bp to 22% to enable banks to free up capital for lending, and to boost their liquidity coverage.
GDP bounced back strongly in the June quarter, growing at an annualised 4.0% rate. Early indicators for the September quarter are positive. Tapering of asset purchases under QE is continuing and we expect the end of the program to be announced after the Fed’s October meeting.
The rise in the consumption tax rate has had the expected impact on the economy. Spending was pulled into the pre-tax months and has fallen sharply since the rate rose from 5% to 8% on April 1st. Although Japanese firms have told the central bank that the consequences of the tax rise
A final word on the Australia-US labour market comparison we wrote about last week. We would not have been surprised to see the US rate lower than Australia’s rate by now before seeing July’s US non-farm payrolls and Australia’s Labour Force report as they had almost converged
Commodity prices remained divergent in July, reflecting broadly positive but somewhat mixed economic data as well as flaring geopolitical tensions in Ukraine and the Middle East. Crude prices fell in early July as concerns about a disruption to Iraqi oil supplies dissipated.
What to Watch, week commencing 11 August 2014
Unemployment rate rises to 6.4% in July from 6.0% in June after changes to unemployment definition
Economic trends in China –the key consumer for bulk commodities –are mixed, with stabilising trends in the industrial sector (having slowed across Q1) in contrast to a slowing trend in the real estate sector (a major consumer of steel). Global steel production has continued to increase.
On the demand side, industrial activity has improved in 2014, but recent indicators have been mixed. In China, the industrial sector appears to have stabilised following signs of moderation in recent months. Mini stimulus measures may have assisted the improvement.
The Reserve Bank of Australia made no change to policy at today’s meeting, as expected. There were minimal changes to the press release, and the RBA again concluded that “on present indications, the most prudent course is likely to be a period of stability in interest rates.”
GDP bounced back strongly in the June quarter, growing by a 4.0% annualised rate. The improvement was broad based and revisions to recent quarters were also positive. Early indicators for the September quarter are positive. We expect solid growth over the rest of the year.
Online retail showed further encouraging signs of growth in June, to be 0.9% higher compared to May, and 9.5% higher compared to a year ago. On the other hand, ABS data showed negative comparable sales growth at traditional retailers in May, to be 0.3% lower than April
NAB Commercial Property Index fell -3 to -6 points in Q2 and continues to track below business confidence. NAB Group Chief Economist Alan Oster said: “Sentiment was weaker in all market segments, except CBD hotels, and also negative in all states, especially in WA.”
Business confidence among Australia’s largest firms dropped significantly – from a position of above average confidence relative to the broader economy to marginally below. Businesses are reacting to the subdued domestic demand outlook.
The 2014-15 Australian wheat season is off to a good start in most growing areas following autumn rain, and domestic prices are at a premium to international levels due to concerns about the impact of a dry spring.
Australia: Building approvals, private sector credit and trade prices highlight the week
India’s new Finance Minister, Arun Jaitley, delivered his maiden Budget on the 10th of July. It was a good document, albeit not a ‘game changer’, and needs to be followed up with further action and implementation. There were positives for consumers, infrastructure spending, real estate.
SME business confidence eased again in the June quarter, but is holding up against heightened consumer anxiety with the support of positive sentiment in property and construction. Conditions rose slightly, but are still at levels suggesting sub-trend growth.
The US equity market posted fresh highs in June, but price support remains good globally and locally, says James Wright, Chief Investment Officer, JBWere. Read more for currency and property news from the NAB FX Strategy team and Nick Ryder, NAB Private Wealth Investment Strategist.
The growth in China’s economy over the past thirty years has been extremely impressive, overtaking Japan in 2009 to become the world’s second largest economy. However when measured on a per capita basis, China’s economy still remains comparatively small – within the ‘middle income’ band.
The latest National Australia Bank (NAB) post-farmgate Agribusiness Survey reports that the sector remains overwhelmingly optimistic about business conditions over the next 12 months, despite the index falling in the June quarter.
The quarterly inflation print is the most important statistic for financial markets in Australia. Several reasons why. First and most importantly the RBA is an inflation targeting central bank and this is their quarterly scorecard.
In late June, China’s politburo agreed to fiscal and taxation reforms that were outlined at last year’s Third Plenum, setting a deadline for implementation at the end of 2016. These reforms should provide greater transparency and predictability of local government revenues.
Australian wellbeing falls to its lowest level since the survey began. Anxiety is still the biggest detractor of overall wellbeing. A “wellbeing gap” has emerged between the highest and lowest income earners.
Business confidence eased a touch, but remains at relatively resilient levels post-budget. Business conditions improved marginally as underperforming industries improve. Forward indicators point to further modest improvement over coming months.
Consumer anxiety spikes post the Federal Government’s budget, with low income earners clearly most concerned. The NAB Consumer Anxiety Index rose to 64.5 points in Q2 (61.7 points in Q1) - its highest level since the survey began in Q1’13.
The Canadian economy recorded a moderate 0.3% increase during the March quarter, 2014, impacted by weather related disruptions. Group Economics is forecasting a 2.3% expansion in 2014, followed by a somewhat quicker 2.5% in 2015
The large fall in March quarter GDP is not matched by other indicators. Data for June quarter suggest growth will resume. Inflation has strengthened in recent months.
After seven years of negotiation Australia and Japan signed an Economic Partnership Agreement last week. Some call it a free-trade agreement but as one of my colleagues noted no trade is entirely free.
Key events in Australia, New Zealand and China. What to Watch, week commencing 14 July
US GDP is now estimated to have declined by a recession like 2.9% qoq (annualized rate) in the March quarter. However, we still think the March quarter weakness is a one-off. Other indicators do not point to an economic downturn.
Housing market sentiment falls as house price growth slows and rental pressures continue to weaken. Local investors step up and foreign buyers less prevalent.
After rising through 2013, the main business surveys have gone sideways in 2014 and the pace of global growth has slipped slightly. We have lowered our global GDP forecasts for 2014 from 3.4% to 3.2%.
Moderate global growth continues after early 2014’s slowing, resulting in slightly lower growth forecasts in 2014 but nearer trend in out years. Mixed picture among advanced economies as US & Euro-zone growth disappoints expectations but UK expansion stays solid...
Business confidence recorded an unexpected increase in the month, with firms apparently shrugging off the sharp deterioration in consumer confidence that followed May’s Federal budget. Firms are sticking to their expectation for stronger activity despite business conditions remaining
Most of us like matters to be resolved quickly and with clarity. This is especially true of financial market folk: Is the economic outlook good or bad? If the RBA isn’t cutting they must be hiking?
There are some more meaty reports due on the economy this week, commencing with the ANZ Job Ads report for June (L: -5.6%), a last partial look into labour demand ahead of Thursday’s labour force report.
The relative price stability that characterised oil, in particular Brent, in the first half of 2014 has been shaken of late by unexpectedly severe sectarian turmoil in Iraq. However, with Iraqi exports largely unaffected, prices have now eased somewhat.
Predictably the RBA left the cash rate unchanged at 2.50%. They also retained their neutral bias – a small surprise – saying again that “the most prudent course is likely to be a period of stability in interest rates”.
Online retail sales growth rebounded in May, after a small decline in April. Online spending totalled $15.3 billion in the past year. Groceries & Liquor and Electronic Games & Toys continued to strengthen while Daily Deals and Personal & Recreational Goods experienced negative growth
The relative price stability that characterised Brent and Tapis in the first half of 2014 has been shaken of late by unexpectedly severe sectarian turmoil in Iraq. After Mosul fell on 10 June, Brent jumped 4% in a week and broke through $115 per barrel by 19 June.
A busy few weeks as we get a good number of timely indicators on the economy as well as the RBA’s latest assessment of developments at tomorrow’s Board meeting. Governor Stevens speaks on Thursday.
Key events in Australia, New Zealand and China. What to Watch, week commencing 30 June
A light period for new data is an appropriate time to take stock of where the economy is at. Short answer is that the pace appears to be coming out of the interest rate sensitive consumer
Supported by still-low bond yields and more positive economic data from China and the US, global equity markets maintained their upward trend in May to close higher in general. However, commodities markets were more mixed.
As China’s economy has grown over the past decade, so too has China’s overseas investment. This has become a highly controversial issue in a number of countries, in part due to the difficulties faced by firms and individuals when attempting to invest in China
Key events in Australia, New Zealand and China/India. What to Watch, week commencing 23 June
Moderate sub-trend growth continues across the emerging market economies of East Asia (S Korea, Thailand, Taiwan, Malaysia, Indonesia, Singapore, HK and Philippines). Lack-lustre growth in world trade has dampened activity in this export-oriented region.
Partial economic indicators suggest that China’s economy has stabilised in recent months. These trends remain in line with our expectations, meaning that our forecasts for economic growth remain unchanged at 7.3% in 2014 and 7% in 2015.
The economy is now estimated to have gone backwards in the March quarter. However, indicators point to a bounce back in the June quarter. Recovery expected to continue over the rest of 2014 and into 2015. We expect growth of around 2¼% this year and 3% in 2015.
Last month, investors ignored mixed economic data and geopolitical risks to push the US share market to a record high, reports James Wright, Chief Investment Officer, JBWere. Read more to also find out what happened in currency markets and the residential property market from Nick Ryder
While China remains our biggest trading partner, other emerging Asian nations – including ASEAN, Hong Kong, South Korea and Taiwan – are critical sources of imports and exports for Aussie SMEs. Understanding these regional economies and their distinct differences is critical.
India’s economy expanded by 4.6% during the year to March quarter 2014; it increased 4.7% over the 2013-14 financial year. By industry, agriculture and financial services were the strongest performing; manufacturing and mining remained in recession.
Key events in Australia, New Zealand and China/India. What to Watch, week commencing 16 June
Bulk commodity markets recorded another relatively weak month –with iron ore prices continuing to ease (falling below US$100 a tonne), thermal coal prices remaining weak, while metallurgical coal eased higher –away from particularly low levels.
The generally upward trend in advanced economy purchasing manager surveys began to fade through late 2013 and 2014 and that has been followed by a levelling out in the rate of growth in world trade and industrial output.
Tensions between the Ukraine and Russia have been less disruptive than a month ago, reducing market volatility and bringing down gold’s risk premium –allowing gold markets to refocus attention on macroeconomic drivers. Reasonably positive economic data out of the US.
In the past month, US natural gas prices moderated slightly on milder weather, but remained around 13% more than the same time last year on extremely low inventories. In contrast, the slide in European gas prices continued in May on low heating demand.
Global growth levelled off through late 2013 and early 2014, partly due to bad weather hitting North America. Advanced economy upturn looks set to continue as interest rates stay low and as the peak in fiscal consolidation has passed
Business confidence survived the government’s ‘tough budget’ intact, but business conditions eased again (reflecting sales). Employment and profits were steady at soft levels. Conditions are mixed across industries, but are generally negative outside of services
In this edition, Business View magazine highlights the success of businesses working with, inspired and supported by family. Our cover story features how Mildura Brewery owners Stefano de Pieri and wife Donata Carrazza successfully blend family and business.
Australia’s online retail spending has continued to grow, sitting at $15.25 billion, while over 65s have experienced the strongest growth post-Christmas – meaning retailers need a clear strategy to reach this growing online consumer base.
Australia’s 25th Prime Minister, the Hon. John Howard, spoke at the World Business Forum about how political contexts shape economic climates, sharing his optimistic outlook for Australia and the US and the challenges ahead for China.
There are signs of stabilisation in the growth in the US and China: the US Fed proceeded with another US$10 billion cut in their monthly quantitative easing program to US$45 billion, while Chinese industrial activity gained some support from a series of targeted stimulus policies.
China’s steel industry is the largest in the world and a key consumer of Australian commodity exports. The industry has been suffering in recent times due to excess capacity, weak profitability and its role in the air pollution crisis, prompting Government plans to rationalise the sector...
The BJP-led National Democratic Alliance won a landslide election victory in the recently concluded elections, with the BJP winning enough seats to govern in its own right. The result was welcomed strongly by financial markets, reflecting gains in both equities as well as the Indian Rupee.
GDP growth paused in the March quarter, but indicators point to a bounce back in the June quarter. The labour market continues to improve highlighted by a large fall in the unemployment rate in April. Other labour market indicators are also improving but more slowly...
Partial economic indicators continue to highlight softening trends in China, evident since the latter part of 2013. These trends remain in line with our expectations, and as such, our forecasts for Chinese economic growth are unchanged at 7.3% in 2014 (before slowing to 7% in 2015).
View the NAB Group Chief Economist Alan Oster’s presentation, 3AW commentator Tom Elliott’s assessment and the Q&A panel at our Federal Budget Breakfast in Melbourne.
Federal Treasurer Joe Hockey handed down the 2014 Federal Budget last night and there’s plenty to talk about. Our team of economists have analysed what it means for you, your business and a variety of key industries with our summary fact sheets.
The infrastructure sector was one of the big winners in the Federal Budget, with the share of infrastructure spending rising in both dollar terms and as a share of government spending. This should go some way in helping to fill the void left by retreating mining investment.
Our leading team of economists have broken-down how the 2014 Federal Budget impacts Australian small business. As well as analysis, we outline the key initiatives and how the industry is responding.
Our leading team of economists have broken-down how the 2014 Federal Budget impacts Australian business. As well as analysis, we outline the key initiatives and how the industry is responding.
The key focus related to health in this year’s Budget is savings. The introduction of GP co-payments, changes to PBS provisions, Medicare safety nets and indexation arrangements will contribute significant savings. We assess the key initiatives impacting Australia’s health sector.
Our leading team of economists have broken-down how the 2014 Federal Budget impacts Australian agribusinesses. As well as analysis, we outline the key initiatives and how the industry is responding.
There’s a lot to talk about following last night’s Federal Budget announcement. NAB’s team of economists have analysed what last night’s Federal Budget means for the Education sector and outlined key initiatives.
NAB Group Chief Economist Alan Oster outlines the key features of Joe Hockey’s 2014 Federal Budget announcement and analyses how it may impact Australia’s economic outlook and financial markets.
The Federal Budget contained few tax surprises, with most of the key revenue changes previously announced by the Government, including the expected additional tax for high income earners, while the Indexation of Fuel Excise will impose an additional cost on both business and individuals.
While some saw this as ‘the Budget we had to have’, the grants news is good. Overall funding for businesses is set to increase under measures proposed in the 2014 Federal Budget. GrantReady summarises what the Budget means for grants and funding programs.
Brendon Lyon, CEO of Infrastructure Partnerships Australia, says the 2014 Federal Budget is an excellent outcome for the national infrastructure sector. He shares his views on the largest-ever national infrastructure investment programme.
The 2014 Federal Budget outlined some drastic measures for the agriculture sector – from changes to Landcare to additional RD&E funding. Colin Bettles, Canberra Bureau Chief, Fairfax Agricultural Media, shares his summary of the proposed measures.
For small to medium business owners, the 2014 Federal Budget contained both certainties and uncertainties. Andrew Conway, Chief Executive Officer of The Institute of Public Accountants (IPA) shared his views on what the Budget means for the sector.
NAB’s Group Chief Economist Alan Oster provides his overall summary of Joe Hockey’s 2014 Federal Budget, including his initial thoughts, how it could impact small and large business, and the wider economic implications for the Australian economy.
Alan Oster, NAB’s Group Chief Economist provides his initial thoughts on the 2014 Federal Budget announcement.
Business conditions more subdued in April but confidence up marginally – shrugging off ‘tough budget’ rhetoric. Sales eased slightly, employment slightly better but still soft, profits weaker. Conditions remain volatile and mixed across industries…
Economic data confirmed slower global growth in Q1, but more timely indicators are looking a little more promising. Japan is a major exception where a recent consumption tax hike is having a distortionary effect. US tapered QE again, but market implications appeared relatively muted.
Charitable giving grew by more than 8% in the year to February 2014, which is a substantial improvement on the 3.3% rate of growth seen in the previous year. Overall, charitable giving has grown by almost 19% since December 2010.
NAB Group Chief Economist Alan Oster provides a pre-budget overview of what he thinks we can expect to hear from Treasurer Joe Hockey’s first Federal Budget announcement next week.
Trends for bulk commodity prices were mixed in April, with relative stability (at very weak levels) for both thermal and metallurgical coal, while iron ore briefly recovered from the low levels in March, before retreating again.
Economic data confirmed slower global growth in Q1, but more timely indicators are looking a little more promising. Japan is a major exception where a recent consumption tax hike is having a distortionary effect. US tapered QE again, but market implications appeared relatively muted.
US GDP growth slowed sharply in the March quarter. This, at least in part, reflected the harsh winter and also a correction to the strong growth seen in the second half of 2013 as inventory accumulation slowed and net export gains were reversed.
There have been concerns around China’s residential property market for a number of years, with bearish observers repeatedly describing the market as a bubble. In March 2014, these fears were elevated by the collapse of the Zhejiang Xingrun Real Estate Company.
In the year to March 2014, Australians spent $15.2 billion on online retail. This level is equivalent to 6.6% of spending with traditional bricks & mortar retailers (excluding cafés, restaurants and takeaway food to create a like-for-like comparison) in the year to February.
Post-farmgate agribusiness conditions fell significantly in the March quarter from a 9-year high in December quarter as supportive seasonal factors dissipated. However, a sustained period of positive readings suggests that underlying fundamentals remain strong.
Globally, commodity markets experienced heightened volatility in March, with the concerns of a slowdown in China and its first domestic bond default triggering some investor risk aversion.
Patrick Vizzone, Regional Head of Food & Agribusiness, Asia, Institutional Banking reflects on how the outcomes of last November’s Third Plenary Session of China’s Communist Party’s Central Committee may shape the Australian agriculture sector.
NAB Commercial Property Index rises above long-term average, but overall still negative (-3 points) and below NAB Business Confidence. Sentiment stronger in all markets, except office (unchanged) and in all states (except NSW and WA). Forward expectations however softer.
Ahead of the upcoming Federal Budget, there is a lot of focus on the Commission of Audit’s findings, and putting the Budget on a sustainable medium term path as the population ages, health and pension costs rise, and the proportion of tax payers declines.
Business conditions for ASX 300 maintained momentum in the first quarter of 2014 - the broader economy weakened as it dipped back into negative territory. Confidence for larger firms surged to its highest level in the 3-year history of the survey.
SME business confidence eased for the first time in over a year – consistent with persistently soft conditions and trends seen by larger firms. Nevertheless, business activity has improved with conditions rising to their highest since mid-2010 – although still sub-trend.
Australia’s role in securing the food, water and supply chains of Asia will be dependent on our ability to embrace change and innovation. Dr. Ken Henry looks at the opportunities that exist for Australian businesses in the Asian century.
There were few surprises in the latest Chinese data release, with the weakening trends evident since the latter part of last year continuing into the first quarter of 2014, with slower economic growth, comparatively soft industrial production and investment data continuing
Business confidence eased from its recent high but remained elevated in the March quarter. Business conditions were soft, but are now much better than 6-months earlier. Forward indicators point to further modest improvements over coming months.
Housing market sentiment lifted slightly in Q1 2014 as sentiment improved in SA/NT and NSW, but softened in Victoria and WA. The outlook for house prices strengthened in all states except Victoria, with Queensland showing the biggest gains in the next 1-2 years.
In a break with tradition, young people are taking a more active interest in their superannuation with the 30-49 year old group being the most concerned about planning for retirement, according to the latest quarterly MLC Wealth Sentiment Survey.
The internet has always been the enemy of music executives, facilitating piracy, denting cd sales and encouraging people to download single songs instead of buying them by the dozen. But it will give executives something to sing about in 2014.
GDP growth is expected to decelerate in the March quarter, partly reflecting the temporary impact of a severe winter. The recovery should get back on a firmer footing over the rest of 2014. We are still expecting GDP growth of 2.6% in 2014 and 2.9% in 2015.that
At its first bi-monthly Monetary policy statement for 2014-15, the RBI maintained the policy Repo rate at 8%, as expected. India’s headline inflation indicators have improved with easing vegetable prices, although the Core CPI remained sticky at 8%, reflecting high prices for services.
The upward trend in the advanced economy business surveys faltered toward the end of 2013 and this has continued into early 2014. Some of this reflected the disruptive impact of bad weather on supply chains but the March business survey results suggest a levelling out in the pace of growth
Business conditions lifted slightly in March, but remained at relatively subdued levels, weighing on business optimism. Confidence still positive but softened to its lowest post-election level to be below long-run trend.
Global economy growing around trend but signs in early 2014 that accelerating growth phase has ended. Mixed conditions across regions with advanced economies providing more of global output expansion as Chinese growth rate trends down.
Prices for most industrial metals have moved lower in response to growth concerns in China and uncertainty over the unwinding of commodity financing deals. However, supply side events are supporting prices for Nickel in particular.
Economic data was mixed over the past month, but the impact from severe weather on advanced economies appears to be abating. Partial indicators suggest China’s economy has continued to slow. US tapered QE again and markets remain volatile as they try to discern Fed direction.
Since mid-January, several idiosyncratic factors, such as the ramping up of takeaway capacity by the Keystone XL Pipeline, better US economic data and unseasonably cold weather, have propped West Texas Intermediate (WTI) prices relative to Tapis and Brent.
Recent improved momentum in online sales stall in February – with trends weaker for most categories – strength remains in Groceries & Liquor, but Personal & Recreational Goods and Daily Deals contract. Online spending up to $15 billion in the past year.
Consumer anxiety rises as fears over job security continue to grow. The NAB Consumer Anxiety Index rose to 61.7 points in Q1 2014 (61.5 in Q4 2013). This was largely driven by heightened concerns over job security (mainly NSW/ACT).
Early this month saw China’s first onshore corporate default, when a Shanghai based solar company defaulted on its bond repayments of RMB 89.8 million (around US$14.7 million). This has been followed this week with a collapse of an unlisted private property development company.
In early March, China recorded its first domestic corporate bond default when the Shanghai Chaori Solar Energy Science & Technology Company failed to make a RMB 89.8 million interest payment, having narrowly avoided a similar outcome in January 2013.
Global equity and commodity markets exhibited increased volatility in the past month, caused by heightened geopolitical tensions in Ukraine, adverse weather events in the US and news of a slowing Chinese economy. December quarter GDP result for Australia was close to trend.
National wellbeing improves after falling in the previous two quarters, but anxiety continues to rise with more than one-third of Australians currently “highly” anxious. The NAB Australian Wellbeing Index rose to 64.6 points in Q1 2014 (63.5 points in Q4 2013).
At the start of this month’s National People’s Congress, Premier Li Keqiang confirmed China’s growth target at ‘about 7.5%’ in 2014, but noted that reform was the Government’s top priority.
GDP growth is expected to decelerate modestly in the March quarter, partly reflecting the temporary impact of a severe winter. Following GDP growth of 1.9% in 2013 we are forecasting GDP will grow by 2.6% in 2014 (previously 2.8%) and 2.9% in 2015.
The upward trend in the advanced economy business surveys faltered toward the end of 2013 and this has continued into early 2014. Nevertheless, this softer note probably reflects bad weather disrupting supply chains.
Recent recovery short lived? Business conditions back-pedalled sharply in February reversing around half post election gains. Confidence softened but still remains marginally above trend. Sales and employment fell markedly during the month, with the latter pointing to very weak labour
Global upturn continues and forecasts little changed. Advanced economies seeing recovery after their prolonged weakness post 2008/9 recession. Mixed trends across Emerging markets with gradual slowing in China and uncertainty over speed of Indian rebound.
India’s economic growth decelerated to 4.7% in the December quarter 2013, in year ended terms, from 4.8% in the September quarter. The standout was the Services sector (particularly Financial services and Community services), which grew by 6.7%, followed by Agriculture at 3.6%.
In the past few months, US natural gas prices have staged some gravity defying movements, fuelled by unusually strong heating demand from the most extreme winter conditions affecting the US in about a quarter of the century.
Global upturn hampered by severe winter weather conditions in the northern hemisphere. Emerging markets (including China) showing signs of a slowdown, although Chinese trade and credit data have been robust.
The average price of gold rose by around 1½% in January and has lifted a further 4½% in February to date, the first consecutive rise since late 2012. Prices have been volatile of late, but are currently trading at around $1,330 per ounce.
Australia’s online retail spending increased to $14.9 billion for the year to January 2014, or by 11.3%, now representing around 6.5% of traditional retail spending. Domestic retailers continue to control the largest share of online sales – at around 74%.
Post-farmgate agribusiness conditions rose significantly to their highest level in 9 years in the December quarter, with across-the-board improvements in all the three components of trading, profitability and employment.
The Manufacturing Activity Index continued with its slow improvement in Q4, supported by strong business confidence and falling labour costs. The index implies activity in the manufacturing industry expanded by 0.5% in Q4.
Moderate economic growth continues across the emerging market economies of East Asia (ASEAN, HK, South Korea and Taiwan) with the pace of regional growth quickening from just under 4% yoy in September quarter to 4.3% yoy in December.
Sentiment rises further in Q4, with NAB’s Commercial Property Index reaching a 2-year high (but still negative overall). Improvement driven mainly by office and retail, although both segments still under-performing. Sentiment edged up in all states bar Qld and SA/NT.
Australia is on track to be the third largest exporter of raw cotton in the world in 2013-14, with forecasts of just under one million tonnes according to the latest Rural Commodities Wrap. The AUD is forecast to track lower which should provide further benefits to exporters.
Business conditions for larger firms improved significantly in the December quarter – outperforming firms in the broader economy. However, confidence weakened slightly for larger firms – dropping below conditions and breaking away from the exuberance of the broader economy.
Concerns have been raised by the rapid growth in local government liabilities in recent years, with questions around the stability and security of China’s sub-sovereign debt, and the risk that a potential default could trigger a broader financial crisis.
How to add Australian Debt Securities & Corporate Bonds to a portfolio. The fourth research report examining the Australian corporate bond market. In this report we place the Australian market in an international context and speculate on what the future holds for the asset class.
SME business confidence up for a fourth quarter – consistent with increases seen by larger firms. Confidence is finally gaining traction to support business activity, with conditions rising to their highest since mid-2011 – but remain soft.
Toyota has announced it would terminate automotive manufacturing operations in Australia by the end of 2017. Ford and General Motors (Holden) previously announced they would close their operations in 2016. The strength of the AUD has weighed heavily on an already struggling industry
Economy still on track despite fall in manufacturing ISM and another weak jobs report. Following GDP growth of 1.9% in 2013 we are forecasting GDP will grow by 2.8% in 2014 and 2.9% in 2015. Inflation remains well below Fed’s 2% objective.
Finding and keeping the right people is fundamental to the success of any business. Gavin O’Meara, Manager of People and Culture at Ramsay Health Care, explains how planning, preparation and ongoing support can help you build an engaged and productive team.
Housing market sentiment lifts in Q4, supported by faster house price growth in all states (bar SA/NT). House prices expected to keep growing in next 1-2 years, but at slower rate than predicted in Q3 survey. Queensland is the exception and now set to lead country for capital gains.
Almost one third (31.7%) of Australians expect a large financial shortfall at retirement with a further 25% expecting a shortfall to some extent, according to a special report: MLC Retirement Survey.
Business conditions maintained last months momentum and is approaching 3 year highs while confidence was up for the first time in 4 months – both near or above trend levels. Employment index much better, but still suggests soft labour market conditions.
The reports utilise our expertise across a range of industry sectors. In this edition we are pleased to present a compilation of articles with an underlying theme around the Australian opportunity in the growing Asian region.
Business confidence in the December quarter was at its highest in more than 2½ years. Business conditions lifted to their highest level in more than 12 months suggesting activity is starting to catch up - albeit still below trend.
Bulk commodity prices softened in January, driven by the end of the restocking phase and seasonally weak steel production - which contributed to weaker demand trends for coal and iron ore. Expanding rail freight capacity in China could impact the country’s demand for seaborne coal
US GDP rose by a reasonably strong 3.2% (annualized rate) in Q4, completing a strong second half to the year. Consumption growth was stronger as were net exports but residential investment went into reverse and public demand was very weak due to the October government shutdown.
Recent improved momentum in online sales maintained in December – with trends positive for most categories - strength in Electronic Games and Toys, Groceries and Liquor, and Media. Online spending up to $14.7 billion in the past year.
At its Quarterly Monetary policy review on the 28th of January 2014, the Reserve Bank of India (RBI) raised the Repo rate by 25bp to 8%, and simultaneously raised both the MSF (Marginal Standing Facility Rate) and Reverse Repo Rate by 25bp to 9% and 7% respectively.
Business surveys and partial data on trade and industrial output show moderate global economic growth continuing through to the end of 2013. There are mixed trends across Emerging markets, with gradual slowing in China and uncertainty over speed of Indian rebound.
Are we at a turning point? Business conditions jump to more than 2½ year high, while confidence broadly unchanged – both now near trend levels. Sales and profits up sharply – especially in wholesale, transport and services – reducing excess capacity slightly.
Global upturn continues and forecasts little changed. Advanced economies seeing recovery after their prolonged weakness post 2008/9 recession. Mixed trends across Emerging markets with gradual slowing in China and uncertainty over speed of Indian rebound.
One of the key challenges in 2014 for China’s Central Government will be how it addresses the ongoing issue of air pollution across the country. Rising levels of smog and hazardous PM 2.5 particles have increased public health concerns.
The big question for 2014 is whether the Australian dollar will keep trending lower with perhaps a secondary question about whether Australian property will continue to boom. According to Business Spectator’s Alan Kohler - yes and yes.
There’s been a lot for Aussie businesses to talk about so far in 2014 - from weather predictions to our reading habits. Here’s a selection of recent business insights to help you uncover the opportunities across all business sectors in 2014.
We expect Q4 underlying inflation to print at 0.6% (2.3% through the year) on Wednesday. This would be the fifth successive outcome in the bottom half of the RBA target range. Subdued wages growth and weak domestic demand continue to keep core inflation well under control.
China’s latest National Accounts data shows that the economy grew by 1.8% quarter on quarter in December, and 7.7% year on year - representing a marginal slowdown from the September quarter (when yoy growth was 7.8%).
The global economy capped off 2013 on a strong note, with monthly measures of global industrial output and trade indicators picking up to finally be consistent with the more buoyant message that the advanced economy business surveys have been signalling since late 2012.
Recent partial indicators of economic activity have been positive. With inventories also tracking more strongly than expected, December quarter GDP growth is now estimated to be 0.7% qoq (3.0% annualised). We are forecasting GDP growth of 1.9% in 2013
The New Zealand economy is set to be one of the strongest in the developed world this year. This should provide a timely boost to the Australian export and tourism industries, particularly if the New Zealand dollar appreciates as much as some expect.
Consumer anxiety rises amid ongoing weakness in the domestic economy. Consumer anxiety rose to 61.5 points in Q4 (61.1 in Q3). With the labour market softening, anxiety over job security has started climbing although it still rates as the lowest concern overall.
The limp performance of metals and bulk commodities over the past couple of years has resembled a unicycle rather than the superbike of previous years. According to Simon Wright of The Economist, the 2014 outlook for demand is rosier and commodity prices should start climbing once again.
National wellbeing deteriorates for the second straight quarter. The NAB Australian Wellbeing Index fell to 63.5 points in Q4 (64.4 points in Q3), with all four survey questions - satisfied life, worthwhile life, happy yesterday and not anxious yesterday - rated lower.
Global upturn continues with advanced economies seeing faster recovery after prolonged weakness post 2008/09 recession. Chinese and Indian economies faring better with no slowing in former and activity picking-up in the latter.
Some of the world’s fastest-growing economies in 2014 will be in Africa. Since 2001, Africa’s GDP has expanded more quickly each year than the global average. In the past decade, only the block of developing Asian economies, led by China, has grown faster than Africa.
Growth rates for online sales increased in November – with trends positive for most categories - strength in Media, Groceries and Liquor, Toys and Electronic Games and Department and Variety Stores. Online spending up to $14.6 billion in past year.
Start to prepare for a new era in the Australian Chinese relationship. Well within five years, instead of simply looking at Chinese manufacturing, Australia will look at the tourist bookings due to a very big rise in Chinese tourism.
As many SMEs might be a million miles away from the mining and resources sector, it’s easy to think it’s all completely irrelevant. That’s not the case. It’s important that you're aware of the general direction of the industry because it can affect your own business.
Through our partnership with Kochie’s Business Builders, David Koch speaks with NAB Chief Economist of Markets, Rob Henderson about his outlook for 2014. Join them as they discuss some of the big trends in the economy that may impact small business.
This year in business there's more to talk about.
The summer edition of Business View Magazine explores the ecosystem behind the business of sport, looking at how entrepreneurs working in and with the sports sector deal with changes in the business environment. Download the free iPad edition via our new publications app NAB Think.
Companies in the industrial raw materials sector are facing a new era. For years, miners of resources such as iron ore, base metals and coal enjoyed a boom driven by incredible demand from China and other emerging markets that were urbanising and investing heavily in infrastructure.
Our expectations that China will achieve its growth target this year remain unchanged. Domestic demand has strengthened recently, with consumer confidence improving, while exports increased strongly during November - contributing to the widest trade surplus for four years.
September industrial output and broader measures of quarterly GDP are finally showing economic growth starting to lift in line with both the business surveys and our forecast for a global upturn in 2014 (growth at 3½% unchanged).
Business conditions and confidence broadly unchanged - with confidence still much higher than conditions. While still weak, business conditions appear to be trending higher. Trading conditions up - especially mining and manufacturing - with capacity utilisation off its recent lows.
Global upturn continues and forecasts little changed. Advanced economies see faster recovery after prolonged weakness post 2008/09 recession. Chinese and Indian economies faring better with no slowing in former and activity picking-up in the latter.
Indian growth accelerated to 4.8%, in year ended terms, in the September Quarter, up from 4.4% in the June quarter. An improvement in the agricultural sector (up to 4.6% from 2.7%), due to a favourable monsoon season, helped drive the improved outcome.
Average oil prices fell for the second consecutive month in November. In addition to the bearish sentiment in the crude oil futures market, oil prices have generally returned to be more aligned with the reality of fundamentals where ample supplies, have served to weigh on prices.
November’s Third Plenum unveiled a wide ranging reform agenda from China’s Government. Proposed deregulation would increase free market influence and could support a stronger medium term growth profile for the economy.
Metals prices remain well below peaks recorded earlier in the year but have been relatively range bound, fluctuating with the ebbs and flows of economic news. As usual, news relating to US Fed policy and the Chinese economy has been particularly relevant.
Australian online retail sales rose to $14.4 billion for the year to October 2013, a level that is equivalent to 6.4% of traditional retail spending. Domestic retailers continue to control the largest share of online sales - at around 73%.
US GDP rose by 2.8% (annualized rate) in the September quarter, continuing the improvement experienced over the course of the past year. However, details a bit weaker as the stronger growth reflected a pick-up in inventories.
US GDP rose by 2.8% (annualized rate) in the September quarter, continuing the improvement experienced over the course of the past year. However, the stronger growth largely reflected a pickup in inventories. Business investment and consumption were weak, but housing is still growing
China has one of the most important labour markets in the world. This is true for a number of reasons. The most apparent is that it has the largest labour market in the world, and rapid income growth is generating a middle class in China that is expected to define the global economy
Global growth remains at a moderate sub-trend pace and it’s expected to pick up to slightly below trend in 2014. However, NAB business conditions remain weak and forward indicators deteriorated slightly. There are still no signs of a recovery in non-mining investment.
Commercial property market sentiment improved slightly in Q3, in line with a modest pick-up in confidence also seen in NAB’s Quarterly Business Survey. However, NAB’s Commercial Property Index is still deeply negative (-13) and below its long-term average (-7).
Global growth rose from 2.4% to 2.8% between March and June quarters and we are expecting 2.9% for 2013 overall, increasing to 3.5% next year. The national accounts and business surveys show a quickening pace of growth in the big advanced economies with the UK and Japan the standout.
China remains on track to achieve its growth target for the year with domestic demand holding up in October, while exports picked up from the disappointing outcome in September. Industrial production was slightly better than expectations for the month.
Firms reassess their confidence on the outlook as business conditions undershoot again. Capacity utilisation falls sharply - especially in manufacturing, construction, mining and retail - despite low interest rates and improved housing and equity markets.
Global upturn continues and forecasts little changed. Advanced economies seeing faster recovery after their prolonged weakness post 2008/09 recession. Mixed trends across emerging markets with solid Chinese growth but disappointing outcomes in India.
At its Quarterly Monetary policy review on the 29th of October, the Reserve Bank of India (RBI) raised the Repo rate by 25bp to 7.75%. It simultaneously cut the MSF (Marginal Standing Facility Rate) by 25bp to 8%; this follows a prior 50bp cut on the 7th October.
US natural gas prices showed significant volatility in the lead-up to the US government shutdown, but trended higher in September and October overall in anticipation of winter heating demand. British natural gas prices also tracked higher in the past two months.
In October, indicators of global economic activity were mixed, casting some doubt over signs of recovery in the advanced economies. The upturn is still under way, but the pace of industrial growth and business sentiment in some big advanced economies has stopped improving.
Donations grew 2.5% (12-month average) in August with an average annual donation of $312 per donor. Giving grew fastest for “Other” (12.8%) and Health & Disability (9.1%) charities, but fell for Humanitarian Services (-3.2%) and Medical Research & Services (-2.4%) charities.
The average price of gold eased by around 2½% in October, though the daily spot price generally strengthened over the second half of the month and is currently trading at around $1,340 per ounce. Gold is set to record its first annual price decline since 2000.
Online sales growth edges up in September – to +0.3% mom (from even weaker sales in August). Sales trends mixed by category. In the year to September 2013, Australia’s online retail spending totaled $14.3 billion. This is equivalent to 6.3% of the traditional bricks & mortar retail sector
Behind the volatility in the monthly data, the trend pace of growth in the emerging market economies of East Asia (which stretch from S Korea to Indonesia) remains weak. Industrial output and export volumes are barely above year-earlier levels, reflecting sluggish growth in world trade.
Stronger conditions for ASX 300 in Q2 - widening the gap to the economy - but confidence fell sharply. Mining conditions fell, now the weakest among ASX 300 firms. Discounting among ASX 300 may be evident. Stocks & orders point to weakness in domestic economy.
As the Chinese economy enters a transitional phase in its development, many are now questioning what this will mean for its future economic performance. The IMF recently examined a number of scenarios for how China’s recent investment driven growth model could unfold over coming years.
Post‐farmgate agribusiness conditions maintained its momentum in the September quarter to remain in positive territory, with the profitability index recording its first positive reading in three years.
SME business confidence broadly unchanged – with no sign of the political kick in confidence seen elsewhere in business. That may in part reflect a significant fall in business conditions in the quarter. SME performance in poor sectors of the economy were similar to larger firms.
The Manufacturing Activity Index was largely unchanged in Q3 – with positive trends for business confidence offset by negative ones for labour and purchase costs and final product prices. The index implies a slight increase quarterly manufacturing activity - at around +0.4%.
According to National Accounts data released today, the Chinese economy grew 2.2% in the September quarter to be 7.8% larger than the same period last year. The improvement in growth from last quarter was slightly above our expectation.
Global bond yields fell in September from the US Fed surprise decision not to initiate the tapering of its quantitative easing program. Meanwhile, commodity markets weakened further. The strong pace in the economic recovery in big advanced economies evident in the first half of the year
Businesses become more confident in the September quarter. This fundamentally appears to be driven by political factors – albeit the lower AUD and rates, together with stronger asset markets would have helped.
The NAB Australian Wellbeing Index fell to 6.4 points in Q3, with a big increase in anxiety in WA a key contributor to lower national wellbeing. Consumer anxiety rose to 6.1 points in Q3, underpinned by rising concerns around cost of living, ability to fund retirement and health.
In September, overall demand for commodities gained support from progress in the global economic recovery. Positive data from major economies is adding to confidence that the recovery in the big advanced economies is currently on track.
September quarter GDP growth expected to be 2.0% qoq (annualised rate). Business surveys more positive on strength of the economy. Partial U.S. Government shutdown will not have a major direct impact on the economy.
Housing market sentiment strengthened notably in Q3, underpinned by an acceleration in house price growth in all states (bar WA). The Survey is pointing to faster price growth ahead (led by NSW and Queensland), but gains are expected to be relatively modest.
After a period where the data showed accelerating growth in the big advanced economies, the latest numbers have been more mixed. Although an upturn is still under way, the pace of industrial growth and business sentiment in some big advanced economies has stopped improving.
Animal spirits lift again. Confidence surges to its highest level in 3½ years. Business conditions, however, still subdued - with employment poor. Signs of better conditions in finance/ business/ property and construction.
Global upturn continues and forecasts little changed - but growth momentum has slowed a touch through mid-2013. Composition of global growth still shifting toward advanced economies with mixed trends in emerging markets.
The recent depreciation of the dollar has not been all good news for Australian business. While a weaker dollar has helped raise returns in export markets and blunted some import competition it has also raised input costs for some domestic industries that are in no position to pass them on.
At its Quarterly Monetary policy review on 20 July, the Reserve Bank of India (RBI) cut the MSF rate by 75bps, whilst raising the Repo and Reverse Repo rates by 25 basis points. The Cash Reserve Ratio was held at 4%, but the minimum daily balance was reduced from 99% to 95%.
In the year to August 2013, Australians spent $14.2 bn on online retail. This level is equivalent to 6.3% of spending with traditional bricks & mortar retailer (excluding cafés, restaurants and takeaway food to create a like-for-like comparison) in the year to July 2013.
Economic data can be baffling. Bombarded with numbers, headlines, warnings and opinions from all directions, it can be hard to know just what to focus on. So what do you really need to know? And what does it all mean? We explain.
Global financial markets rallied strongly when US Federal Open Market Committee (FOMC) defied market expectations of a modest tapering and decided to leave retain the status quo on the pace of asset purchases.
The NAB Quarterly Business Survey showed a marginal deterioration in overall business conditions in the June quarter, with the level remaining close to four year lows. All states experienced difficult conditions in the quarter.
Recent business surveys show a solid and synchronised lift in business confidence across the advanced economies whose annualised 3-month industrial growth now exceeds that of the emerging economies.
US GDP for the June quarter revised up from 1.7% (annualized rate) to 2.5%. While some partial indicators were soft at the start of the September quarter, business surveys point to a stronger underlying momentum in the economy. We have revised up our forecast for GDP growth in 2013 to 1.6%
The most recent batch of partial economic indicators provide further evidence that China's economy may be stabilising, supported by improved foreign demand and a shift in policy stance. There may have also been a delayed impact from rapid credit growth earlier in the year.
There has been a large divergence in views over the future path of China’s monetary policy/stimulus over the medium term. While the majority view expects target interest rates and reserve requirements to remain unchanged until early 2015, there are still analysts calling for cuts to rates.
Confidence rises everywhere and surges in mining, construction and finance/ business/ property. This appears to reflect expectations of political change & more certainty about future political frameworks. Against that, business conditions and capacity utilisation remained poor.
Recent data show a promising lift in business sentiment in big advanced economies but financial volatility hitting emerging market growth prospects (India, ASEAN, and Brazil). Little change in headline global growth forecast with advanced economy upturn set to drive faster world economy
The Indian economy (Production, at factor cost) grew by only 4.4% over the year to the June quarter, 2013. This is the slowest pace of growth since March 2009. By Production, services (primarily financial and agriculture) were the mainstay; in contrast, mining and manufacturing contracted
More positive news on the major economies has provided a slight boost to most commodity prices in August, with the long awaited rotation of global growth towards the big advanced economies seemingly underway. Global manufacturing activity also appears to have gained momentum.
Australian online retail sales rose to $14.1 billion in the year to July 2013, a level that is equivalent to 6.3% of traditional retail spending. Department & Variety Stores, Groceries & Liquor and Media drove the growth over this period.
Oil prices strengthened in July, reflecting heightened concerns over the security of supply with the violent unrest in Egypt, an uptick in Asian crude demand due to improved margins, as well as ramped up refinery runs and tight supply.
Metals prices remain well below peaks recorded earlier in the year but have seen some support recently from more upbeat economic data, particularly from the large advanced economies, although China is showing early signs of stabilising as well.
The price of gold fell by a notable 4.3% in July, but has stabilised more recently, recovering by a modest 2.8% over August to date. Spot gold is currently around $1,380 an ounce. The price of gold will certainly record its first annual decline since 2000.
Post-farmgate agribusiness conditions rebounded in the June quarter to be mildly positive but confidence fell marginally. Customer demand remains the single most significant constraint to businesses’ future profitability. Expectations for capex plans surged to the highest in two years.
US GDP rose by 1.7% (annualized rate) in the June quarter, an improvement on the March quarter, but still only a modest rate of growth. The stronger growth largely reflected a pick-up in business investment and a much smaller detraction from growth from public demand.
Global equity markets recovered earlier losses as it became clear that central banks would not rapidly turn off their monetary easing, although we still expect the US Federal Reserve to start tapering in the coming few weeks.
Partial economic indicators, although still subdued, provided some signs that the economy may be stabilising. Trade data were somewhat above expectations, including much stronger import growth pointing to improved domestic demand.
Central bank statements reinforcing their guidance that interest rates should stay low for a long time yet across the big advanced economies, have supported financial markets. Recent business surveys and industrial data point to an upturn in growth in these advanced economies
Global growth unchanged as modest country forecast revisions cancel each other out. We see moderate acceleration in global growth to around trend in 2014. Recent data show promising signs in big advanced economies while conditions still softening in emerging market economies.
Business conditions remain at 4 year lows while confidence slumps to 8 month low - despite a falling AUD and lower interest rates. Conditions very poor in manufacturing, construction, mining, retail and wholesale; WA now the weakest state.
Partial economic indicators, although still subdued, provided some signs that the economy may now be stabilising. Trade data came in somewhat above expectations, including much stronger import growth pointing to a pick up in domestic demand.
At its Quarterly Monetary policy review on the 30th of July, the Reserve Bank of India (RBI) maintained the benchmark repo rate at 7.25%, and the reverse repo rate at 6.25%.
Sentiment in the commercial property market weakened notably in Q2 2013. The recent softening in economic conditions (and more subdued outlook for GDP growth) seem to have weighed most heavily in office and industrial markets, with retail unchanged (but very weak).
Most businesses in the healthcare sector are affected by fluctuations in currency and interest rates. NAB’s Head of Corporate & Institutional Markets, Darren Hooton, cautions against complacency and suggests strategies for mitigating risk.
Exports from Australia to the emerging economies of Asia (ASEAN, S Korea, Taiwan, HK) remain below their 2011 peak, largely because of lower commodity prices. Dairy is 40% of New Zealand exports to these economies and higher dairy prices have driven a rebound in its earnings from the region
The government’s economic forecasts now recognise the softness of the domestic economy and the weaker outlook for commodity prices and incomes. In the near term the Budget now looks to be slightly adding to growth (rather than detracting as at Budget time).
US GDP rose by 1.7% (annualized rate) in the June quarter, an improvement on the March quarter, but still only a modest rate of growth. The stronger growth largely reflected a pick-up in business investment and a much smaller detraction from growth from public demand.
Online sales growth slowed to +14% yoy in June - the second slowest rate recorded. Fewer Fridays and a lack of product launches may have contributed to subdued growth. In the twelve months to June 2013, Australian online retail spending totalled $13.9 billion.
We had already been forecasting a 25bps rate cut in August to 2½% and with the Governor giving the green light for lower interest rates this now looks a sure thing. We now also expect an additional 25bps cut to 2.25% before year end – most likely in November after the Q3 CPI.
SME confidence & conditions improve significantly with activity of smaller firms outperforming larger firms for the first time in almost four years. SME conditions strengthened across most industries.
In this edition, we delve into the experiences of finance commentator turned business builder Alan Kohler, detail bringing an invention to life and explore running a business in an extreme climate. We also cover retaining staff, handling tax in your SMSF and negotiating contracts in China.
Stronger conditions for ASX 300 in Q2 - widening the gap to the economy - but confidence fell sharply. Mining conditions fell, now the weakest among ASX 300 firms. Discounting among ASX 300 may be evident. Stocks & orders point to weakness in domestic economy.
If you’ve been thinking about improving the efficiency of your importing or exporting business with Australia’s largest trading partner, there’s now a more efficient way to settle trade transactions in China. Hear the latest insights from NAB’s team of experts.
Global equity markets have come under downward pressure, but the latest data on activity is slightly more positive. Business sentiment about current conditions has picked up in advanced economies and growth in global industrial output is faster.
According to recently released National Accounts data, the Chinese economy grew 1.7% in the June quarter to be 7.5% larger than the same period last year. This result is in line with our forecast for the quarter.
Business conditions struggle in the June quarter and confidence falls back, driven by a pessimistic mining sector. Falling equities and offshore concerns likely to be weighing on sentiment. Little sign yet that lower interest rates and AUD are helping.
According to National Accounts data released today, the Chinese economy grew 1.7% in the June quarter to be 7.5% larger than the same period last year. This result is in line with our forecast for the quarter, a solid outcome relative to the recent spate of soft partial indicators.
Overall, the US economy appears to be continuing to grow at a modest pace. While GDP growth is likely to slow in the June quarter, this is partly due to an expected inventory correction. We are forecasting GDP growth will strengthen in the second half of the year.
Australian Debt Securities and Corporate Bonds - What’s the risk? Important considerations for Investors. We bring you the second of five research reports examining the Australian corporate bond market, prepared for National Australia Bank by the Australian Centre for Financial Studies
Housing market sentiment weakened in all states in the June quarter as prices took a backward step and rents slowed. Capital and rental expectations were also more measured, with confidence seemingly undermined by softer economic growth.
Equity and currency market volatility reflects uncertainties over the pace at which the Fed might alter US monetary policy, Chinese authorities might clamp down on shadow banking and the potential impact of the Bank of Japan’s move to greater monetary easing.
Business conditions and capacity utilisation slump to a four year low. Confidence a little better but still below trend. Conditions very bad in retail, mining and manufacturing, despite low interest rates and falling AUD, though signs a little better for exports.
Global growth forecasts unchanged. A few signs that activity is picking up in some advanced economies but India and Brazil still soft and growing concerns over pace of Chinese growth. Markets focussed on central bank policy driving greater volatility in equities and currencies.
The asymmetric (downside) risks we alluded to in our previous AUD forecast update have eventuated and we have now made further downward revisions. The Fed's return to the (early stages) of policy normalcy in itself justifies an AUD/USD in the low 0.80s.
Global financial markets have taken a dive at the suggestions of the US Federal Reserve scaling back quantitative easing soon and the drying up of new stimulus initiatives by the Japanese government.
Overall, the heightened volatility in global financial markets associated with central bank decisions in the US and China has weighed on commodity prices. The slowdown in the Chinese economy is also gaining traction in markets and further weakens demand prospects.
Expectations for the US Federal Reserve to begin tapering its $85 billion in monthly debt buying this year, a rising US dollar and a slowing Chinese economy have sent ripples through the gold market. The price of gold is now heading for its first annual decline since 2000.
Bulk commodity prices remain under pressure from mounting concerns over the China growth outlook. Nevertheless, iron ore is receiving some support from tentative restocking activity, while a margin squeeze in the coal market could suggest that prices are approaching their bottom.
In the final quarter of 2012-13, the Indian economy grew by 4.8%. This was broadly similar to the upwardly revised third quarter estimate of 4.7%. Somewhat softer growth in the last 2 quarters of the current fiscal year has pushed overall growth in 2012/2013 to 5%, the lowest in a decade.
For the year to May 2013, Australians spent around $13.7 billion with online retailers. This is equivalent to 6.1% of the spending in the traditional bricks & mortar retail sector (excluding cafés, restaurants and takeaway food for a like-to-like comparison) in the year to April 2013.
In its mid quarter Monetary policy review, the Reserve Bank of India held its benchmark Repo rate at 7.25% and the Reverse Repo rate at 6.25%. The RBI expressed concern at the sudden, steep depreciation in the Rupee amid a high current account deficit.
Australian wellbeing improved in the June quarter despite softening economic conditions. NAB's Australian Wellbeing Index measured 6.6 points, up from 6.2 points in the March quarter. Consumer anxiety fell in the quarter in line with moderating concerns about future spending/savings plans.
Early indicators suggest GDP growth will slow a little in the June quarter from its March quarter level. However, as the impact of tax increases and the automatic budget cuts fades, growth is expected to strengthen later in the year. We see GDP growth of 2.1% in 2013 and 2.9% in 2014.
The consensus view is that the pace of global growth should accelerate through the course of 2013 as recessions end in Western Europe, Abenomics lifts Japanese growth, the US continues its moderate expansion and solid growth continues in the big emerging economies.
Economic activity in China appears to have slowed further during the month of May, although the moderation in growth continues to occur at a gradual pace - keeping concerns of a hard-landing at bay. Nevertheless, hopes of a meaningful acceleration in growth this year have faded.
Business conditions remain at low levels (marginally higher) with unchanged mediocre confidence levels. Conditions better in wholesale, manufacturing and construction, but mining worsens. Any confidence gained from falling dollar and May rate cut have been undermined by domestic weakness
Global growth forecasts little changed. Still waiting to see firm evidence that the expected acceleration in activity through 2013 is beginning. Australian economy now at a watershed as mining investment slows and domestic economy struggles.
We have been flagging likely downward revisions to our AUD forecast for a couple of weeks now, following first the somewhat unexpected May RBA rate cut then the range-break higher in US Treasury yields
US natural gas prices trend higher on rising exporting prospects and forecasted warmer-than-average temperatures in the upcoming summer. British natural gas prices have returned to more normal levels as supply pressures ameliorate from restored Qatari deliveries and Norwegian production.
Commodity markets have been mixed but overall sentiment remains bearish reflecting soft economic data in most regions. However, signs of improvement in the US economy could help to support commodity demand, but the effect on market expectations for Fed stimulus will create headwinds.
For the year to April 2013, Australians spent $13.5 billion online - a level that is equivalent to around 6.0% of traditional retail spending. Online retail sales have continued to grow at a vastly stronger rate than the traditional bricks & mortar retail sector.
The Bureau of Resources and Energy Economics’ (BREE) latest biannual update on the state of mining, infrastructure and processing facilities projects in Australia has provided further evidence that the peak in mining investment is quickly approaching.
With the exception of dairy, the prices of most other agricultural commodities have headed south this month. In April, the Rural Commodity Index rose marginally USD terms by 0.8% while fell by 2% in AUD terms. This month, lamb is our commodity in focus.
After a positive December quarter result, the March quarter result has relapsed into negative territory, to be more consistent with the negative pattern observed in the three quarters prior to the December quarter. On balance, more survey respondents reported poor conditions than good.
Partial economic indicators lack any strong indication that conditions are improving in China. While indicators for April came in broadly consistent with expectations, the market has revised expectations lower in response to a run of disappointing outcomes since the start of the year
The NAB Commercial Property Index rose in Q1’13 (but still remained negative), driven by an uplift in sentiment in the office, retail and industrial property markets.
Understanding how the Federal Budget impacts you and your business can be complex. Our team of leading economists, tax and superannuation experts keep you up-to-date with all the latest news from the 2013 Federal Budget so we can help you get all your ducks in a row.
With the Federal Budget being handed down yesterday, we want to ensure you understand what it means for you and your business. Our team of economists and industry experts have analysed what the Budget means overall for Australian businesses, as well as focussing on specific industries
US GDP rose by 2.5% (annualized rate) in the March quarter. Underlying trend is modest growth. We are forecasting GDP growth of 2.1% in 2013 and 2.9% in 2014. While GDP growth will likely moderate in the current quarter it should strengthen in the second half of the year.
Following the announcement, NAB’s panel of leading economists and industry healthcare experts have analysed the Governments’ much-anticipated 2013 Federal Budget, and here they share with Health View their breakdown of what it means for the healthcare sector.
“What a difference a year makes”. NAB’s Group Chief Economist Alan Oster gives his detailed summary of this year’s Federal Budget. Who benefits from the Government’s proposed spending and who doesn’t, and what does it mean for the Australian Economy?
This year’s budget contains a number of negatives for the resources sector. NAB’s Group Chief Economist, Alan Oster, looks at where the government has targeted it’s efforts including impacts to exploration and many mining and energy programs.
NAB’s Group Chief Economist, Alan Oster, looks at the key reforms impacting Big business. The Federal Budget focuses on a crackdown on profit shifting, banning of dividend washing, reducing thin capitalisation safe harbour, removal of R&D and exploration incentives.
Our panel of economists break down the impacts of the 2013 Federal Budget for education headlined by the increase in school funding as well as increased funding for early childhood development. Find out what all the key initiatives are.
With Infrastructure spending being a key component of the 2013 Federal Budget, our Group Chief Economist, Alan Oster takes a deeper look at the key initiates and what they mean.
Agribusiness has emerged as a net beneficiary of the budget, with the diesel fuel tax rebate – speculated as an area of possible cut prior to the release – remaining intact. That said, the overall gains are rather modest.
Following the 2013 Federal Budget announcement, Alan Oster, NAB’s Group Chief Economist, provides a quick overview of what he sees as the outcomes and impacts to individuals and businesses. Watch his video now.
The Council of Small Business Australia’s (COSBOA) CEO, Peter Strong, provides his summary of what the Government’s Federal Budget announcement means for small businesses – do they stand to benefit or will they be worse off?
Business Spectator share a candid account of what it’s like inside the Federal Budget lock-up ahead of tonight’s announcement …..the budget lock-up is a strange place where 'parameter variations' are king and phoneless journalists fight over warm sushi and moneyed clichés.
The Council for Small Business Australia’s CEO, Peter Strong, talks to Business View, about the key areas they’d like to see addressed in tonight’s 2013 Federal Budget announcement and how those areas could help the broader Australian economy.
Chinese partial economic indicators were largely in line with expectations in April. However, we are yet to see signs that real activity is significantly picking up. We continue to expect growth of 8% in 2013, although risks remain skewed to the downside.
Business conditions remain very difficult and confidence stumbles after showing signs of recovery earlier this year. Despite less negativity in retail & manufacturing, activity still very poor and labour market showing new signs of weakness.
NAB’s Chief Economist, Alan Oster provides a pre-budget overview of the Australian housing market and the outlook for interest rates. Join us on Wednesday 15 May for a full budget breakdown.
NAB’s Chief Economist, Alan Oster provides a pre-budget overview of the Australian economy focussing on what we’ve already seen from the Government and commentary on the deficit. Join us on Wednesday 15 May for a full budget breakdown.
Commodity markets remain bearish following disappointing global economic data outcomes in the US, China, and Europe. However, weaker growth has increased expectations for policy stimulus.
The carbon pricing budget black hole may sound bad now, but it’ll get far worse due to completely unrealistic assumptions in the Coalition’s budget costings. It’s been reported that Treasury will now dramatically revise down the expected revenue from the government’s carbon pricing scheme.
The gold price fell by 6.6% over April. Recent gold demand appears to have fallen sharply on news of soft US inflation, slowing Chinese growth as well as fears that highly indebted European countries like Cyprus may resort to selling gold reserves.
The improvement in metals prices seen over the second half of 2012 has been completely unwound, largely due to a lack of physical demand and market concerns over the outlook for demand. In aggregate, base metal prices were 5% lower over March and down more than 10% over the year.
Online sales growth slowed in March to +15% yoy, with sales possibly impacted by the absence of new flagship tablet release. In the twelve months ending March 2013, Australian online retail purchases were $13.3 billion.
ASX 300 show greater resilience than the broader economy in Q1, with conditions stable. Finance, Business & Property considerably stronger. Confidence rebounded but weaker forward orders & stocks point to potential softness in the next quarter.
US GDP rose by 2.5% (annualized rate) in the March quarter. Underlying trend is modest growth. Growth in the quarter was largely driven by private consumption and a positive contribution from inventories. Fixed investment was weaker than the previous quarter but continues to grow
National accounts for the March quarter came in well below expectations, suggesting a more subdued economic recovery than previously thought. Real GDP growth eased to 7.7% yoy, from 7.9% last quarter. Consumption made the largest contribution to growth but it is too early to say an...
SME confidence & conditions edge higher in March quarter but still near post-GFC lows; SMEs more pessimistic than larger firms and activity also more subdued. Capacity utilisation falls to lowest level in history, despite tick up in forward orders. Signs lower borrowing rates are helping…
The Manufacturing Activity Index improved in Q1, up to neutral levels – driven largely by less negative levels for business confidence. The index implies no growth in quarterly manufacturing activity – which would represent a slowdown according to recent official data.
With little indication of inflation pressures emerging in the early months of 2013, we expect the CPI release (due 24 April) to confirm that underlying inflation remained subdued in March quarter 2013. We see underlying inflation remaining within the RBA’s target over the medium to longer…
Global financial markets are digesting latest Euro-zone crisis (Cyprus) where bank depositors are being forced to take losses. Pre-crisis global financial markets had been on a strong rally, especially against the background of still sluggish economic performance in the…
Exports from both Australia and New Zealand to the Asian Tiger economies (ASEAN, S Korea, HK and Taiwan) remain below their previous peaks, largely reflecting lower prices for key export commodities.
Business confidence lifts from late 2012 lows but still below average. That reflects better global confidence, stronger equity prices and lower borrowing rates at home. Conditions still subdued and with marked weakness in trade and consumer dependent sectors. Forward indicators …
According to Chinese National Accounts released today, the Chinese economy grew 1.6% in the March quarter, which is a 7.7% increase on the same period last year. This result is softer than expected and casts some doubt over expectations for a robust recovery in the Chinese economy...
Charitable giving slowed in the year to February 2013 as economic conditions and consumption weakened, and business and consumers became more cautious. The NAB Charitable Giving Index grew by 2.6% (12-month average) in February 2013 – down from 8.3% in the same period one year earlier.
Housing market sentiment rises across all states except Queensland. NAB Residential Property Index climbs sharply as more property professionals report capital and income growth. The out-performance of WA continues, but there was a big turnaround in expectations in Victoria. All states …
Partial data for the March quarter are pointing to a noticeable pick-up in GDP growth following only weak growth in the December quarter. We are expecting GDP growth of 2.4% (revised from 2.2%) in 2013 and 2.9% in 2014. While we expect growth to slow modestly in the June quarter, it ....
Our global forecasts remain little changed at 3.3% in 2013 and 3.9% in 2014. Renewed Euro-zone instability has taken a toll on global equity markets, which had strengthened quite markedly since late 2012, especially when compared to global economic activity and commodity markets.
Commodity markets have turned bearish again following softer than expected economic data outcomes and concerns over a government crack down on Chinese real estate. The Cyprus banking crisis has also dampened confidence, while the terms of the EU bailout, and subsequent rhetoric has …
Global growth forecasts unchanged. Activity still sluggish but set to accelerate in second half of 2013. Financial markets digesting latest Euro-zone crisis (Cyprus) and new Japanese monetary policy.
Business conditions fall to weakest level in almost four years but confidence steady. Previous surge in activity in consumer sectors retail & manufacturing unwinds, with signs lower interest rates need more time to fully work through economy.
Oil prices weaken in March, reflecting European crisis fears following Cyprus deal, a recovery in North Sea oil production and a return of South Sudan oil exports. Most notable declines were recorded for Brent and Tapis oil. Global oil demand forecasts for 2013 revised down reflecting …
The recent rally in bulk commodity prices has stalled with both coal and iron ore prices giving back some of their recent gains; average monthly prices declined in March. Global steel production has continued to grow at a good pace in recent months, driven by increasing Chinese …
The new NAB Quarterly Australian Wellbeing Index has been launched in conjunction with the NAB Quarterly Australian Consumer Anxiety Index with the aim of assessing perceptions of wellbeing and consumer stress.
Online Retail Sales Index weaker in February. Sales grew by +19% yoy in the month, the weakest growth rate since May 2012. For the twelve months ending February 2013, Australia’s online retail spending totaled $13.1 billion. This level is equivalent to around 5.9% of Australia’s …
In this months economic update we revisit our outlook for the Chinese economy and what we can expect to see from the People’s Bank of China over the forecast horizon.
Post‐farmgate agribusiness conditions lifted in the December quarter to be moderately positive after three consecutive quarters of decline. Customer demand, availability of suitable labour, government policy and regulation to act as constraints. Medium‐term expectations improved…
The disparity between business conditions that became increasingly pronounced following the GFC has narrowed over recent quarters; however, the convergence of conditions readings largely reflects a weakening in previously stronger performing industries and regions, suggesting…
It has been an eventful month with the annual National People’s Congress (NPC) getting underway early last week, while a number of policies to curb property prices were also announced in the lead up to the gathering – triggering a sharp correction in equity markets.
Economic (GDP) growth appears to have resumed in March quarter after December quarter lull. We are expecting GDP growth of 2.2% in 2013 and 2.9% in 2014. Growth to be supported by some fading headwinds, growing business investment and continued recovery in the housing market.
Financial markets have lifted as confidence in the global growth outlook has firmed but late 2012 data for world exports and industrial output remained soft, showing modest expansion in activity at best.
Global economy still sluggish in late 2012 but equities strengthen on stronger risk appetite and expectations of sustained global recovery. Partial data suggest better start to 2013; we still see marginally better growth in major advanced economies this year, accelerating in 2014.
Business conditions & confidence both edge down in February. High AUD hurting manufacturing and lack of non-mining demand weighing on most sectors. Large falls in orders, poor capacity use, and weak capex plans (esp. mining) don’t augur well for near-term (weak) domestic demand.
The recent capex and exploration expectations data suggest that mining investment may be approaching a turning point. A decline is inevitable: the question is when and how fast. On the basis of past engineering construction commencements, there are reasons to believe …
Global and domestic financial markets have continued to improve as confidence in the global economic outlook firms. Strong underlying fundamentals of the US economy and signs of recovery in China have encouraged a more bullish market outlook. Commodity markets are less buoyant.
As expected, the RBA left the cash rate unchanged at 3.00% yesterday, also retaining their monetary easing bias, or in their words, “the inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand”.
Once again, movements in commodity prices have been dominated by events in China and growing speculation over the timed withdrawal of QE stimulus by the US Fed. With market participants on the sidelines throughout most of February due to many of the Asian economies celebrating the …
Online retail sales continue to shape the Australian marketplace. Sales rose to an estimated A$13 billion in the year to January 2013 and is now equivalent to 5.8% of traditional bricks and mortar sales (excluding food).
This month in Agribusiness View, we have an in-depth talk with food producer Maggie Beer, hear about Asia’s growing demand for milk and dairy products, and learn how grain growers can manage their risk. We also give you a new view on women in the agricultural industry.
NAB Commercial Property Index increased slightly to -17 points in Q4’12 but performance varied across individual property markets. CBD hotel index rose strongly, but retail and office indices hit new lows as economy slowed. Recovery expectations also postponed in all markets …
As is usually the case for this time of year, the seasonal impacts from the Lunar New Year holiday are reaping havoc with China’s economic data. In addition to the obvious seasonal impacts, statistical authorities also refrain from releasing some of the more closely watched statistics …
US GDP fell in the December quarter but the underlying trend is modest growth. Extremely loose monetary policy likely to continue for an extended period. Expect QE3 monthly asset purchases will finish at end of 2013. Fed funds rate likely on hold until late 2015/early 2016
SME confidence & conditions weaken a touch in Q4 and poor relative to history; sentiment and activity of SMEs a touch weaker than their larger counterparts. Forward indicators remain subdued implying little upturn in near-term activity. Weakness in manufacturing, retail, wholesale and ….
SME confidence is expected to increase as financial markets show some improvement and consumers continue to spend strongly in certain sectors. While the dollar is expected to remain high, the cash rate could fall as low as 2.25 percent this year, reveals NAB’s Head of Australian Economics.
Business confidence hangs on to gains made last month on reduced global fears. Business conditions improve a touch, but still poor. Signs that previously stronger industries are being dragged down by weakness elsewhere. Capacity utilisation now lowest since 2001 and forward orders remain …
After having stalled through much of last year, the process of trade integration between Australasia and East Asia regained momentum at the end of 2012 – especially exports to China. Exports from both Australia and New Zealand to the “Tiger” economies remain below their earlier levels.
There's been considerable debate recently around whether the natural resources boom has ended. In this edition of Corporate Finance Insights we step back from the day-today volatility in coal, iron ore and energy prices and try to understand some of the key drivers of the recent boom.
Business conditions weaken to lowest level since June quarter 2009; weakness very apparent in construction, manufacturing and now mining. Forward indicators worsen. Confidence edges lower and very subdued – especially in mining. Medium-term expectations poor and capex lower again.
Online Retail Sales Index dipped in December (from Nov peak) – a seasonal trend around Christmas. Sales up 23% yoy, but slowing implying a ‘weaker online’ December. In 2012, Australia’s online retail spending was $12.8 billion. This level is around 5.8% of the size of Australia’s.
Basel 3 represents significant regulatory change, with profound impact on the global financial system, including Australia. This publication and related articles look at the likely impacts of Basel 3 and potential opportunities for Superannuation funds.
US GDP fell by 0.1% (annualized rate) in the December quarter following quite solid growth in the previous quarter. Underlying trend is modest growth. The quarterly decline reflects a big drop in federal defence spending and slower inventory growth as well as a decline in net exports.
NAB Residential Property Index rises in Q4’12 as the rate of decline in national house prices slows and rents grow. Property professionals expect mild house price gains in the next 1-2 years, with expectations for capital gains highest in WA and weakest in SA/NT.
Financial and commodity markets have generally strengthened recently, following the last minute agreement to hold off the US fiscal cliff. Signs of strengthening in China’s manufacturing sector has also provided some confidence about the outlook for global growth.
Financial markets have lifted as confidence in the global growth outlook firmed but late 2012 data for world exports and industrial output remained soft, showing modest expansion in activity at best. Central bank action in the Euro-zone, US and Japan has boosted market hopes
National accounts for the December quarter came in slightly stronger than expected, suggesting the economy has achieved a soft landing, at least for now. Real GDP growth rose to 7.9% yoy, ending seven consecutive quarters of slowing growth. Growth for the year came in at 7.8%
Global economy sluggish in late 2012 but signs of an upturn, that gathers pace through next two years. Financial markets strengthen reflecting “risk on” as confidence in global outlook strengthens in wake of central bank action. Emerging market economies will still drive global growth.
Business confidence posts a sharp jump in December, but not so activity and forward indicators, which remain poor - particularly wholesale, manufacturing, retail and construction. Better external sentiment (temporary avoidance of the US ‘fiscal cliff’), strengthening in Chinese data
Today’s economic data releases for China came in broadly in line with expectations, providing evidence that the economic slowdown may have bottomed in the September quarter. The national accounts show that the economy expanded by 7.9% over the year to the December quarter...
We expect the December quarter CPI release (due 23 January) to confirm that inflationary pressures remained moderate in the final months of 2012. We expect a core inflation rate of 0.7% (2.4% through the year; including the impact of carbon), unchanged from the September quarter...
The ‘fiscal cliff’ has been substantially scaled back. The fate of scheduled automatic budget cuts (delayed for only two months) is still subject to negotiation and an increase in the debt limit is also still to be agreed. The U.S. economy continues to track along at a moderate pace...
RBA now expected to cut by 75 points to 2¼% as economy struggles. With the economy continuing to weaken and unemployment set to rise noticeably through 2013 the RBA will need to cut significantly further than previously expected in 2013.
In this edition of Business View, we talk to Federal Treasurer Wayne Swan and hear from some of Australia’s most unique and successful business owners, including Maggie Beer. We also offer new angles on pricing, marketing, self managed super funds and creativity in the workplace.
Online Retail Sales Index surges ahead of Christmas, but year-on-year growth only edged higher to 27%. In the twelve months to November 2012, Australians spent around $12.6 billion on online retail. This level is equivalent to 5.7% of the scale of traditional bricks & mortar retail
We explore various topics including a current view on the management of foreign exchange and interest rate risks and the results of a client survey conducted by our Group Economics team on current business conditions and reforms in the Australian healthcare sector.
China’s economic indicators for November continued the broadly improving trend seen recently, supporting our expectation of a modest recovery in GDP growth this quarter. Government investment stimulus and accommodative monetary policy will help offset headwinds from external sectors.
Although interest rates are historically low in the advanced economies and central banks have stepped up liquidity injections, their pace of economic growth remains very weak. The big emerging economies are driving global growth, and it looks as if their economies are stabilising.
The Australian economy appears to have stumbled into the December quarter. For agricultural commodities, markets have been fairly mixed over the past month. Grains prices have softened a little on expected demand rationing while sugar and cotton remain subdued.
Global growth still sluggish and expected to stay that way in 2013. US growth is moderate, Japan and Euro-zone weak, emerging economies now driving global expansion. Australian economy slowed in Q3 and may soften again in Q4.
The brakes have firmly tightened on activity in November; business conditions very weak in construction, retail, manufacturing and wholesale. Signs of trouble ahead with confidence slumping to lowest level since April 2009, with little hint of a pre-Christmas revival
China’s economy showed further signs of steadying in October with most of the partial indicators recording an improvement. Year-ended growth in production, retail sales, fixed investment and exports all accelerated in the month. In contrast, bank credit came in below expectations.
The fiscal cliff refers to the large fiscal contraction that will occur early in January 2013 due to increases in taxes and reductions in spending under existing law. Given the state of the economy and the limited ability of monetary policy to respond
Australia’s online retail sales are continuing to climb, up to A$12.3 billion in the year ended October 2012, but for now the share of total spending is still modest, at around 5.6%. The rate of growth in online sales has strengthened considerably over the last six months.
China’s meteoric rise to becoming one of the world’s economic superpowers has redefined global economic growth, specifically, the fundamental drivers of commodity markets. China’s advancement has had significant ramifications for commodity exporting economies, including Australia.
The post farm gate agribusiness conditions index posted a decent turnaround following a very weak June quarter. Driving the result was an increase across the three key components that make up the index, with the sharpest turnaround being trading conditions.
Global growth still sluggish with major divergences between different regions. Below trend growth expected to continue into 2013 as world economy averts major risks in US and Euro-zone. Australian economy stumbles into Q4, with growth clearly below trend.
Business conditions stumble to weakest level in more than three years, with wholesale and manufacturing conditions especially subdued. Confidence also edges lower. Activity forecasts unchanged but 25bp February rate cut on the cards, providing modest Q4 CPI.
China’s strong import program is one of several global factors colliding to underpin wheat prices through the end of the year and into 2013, according to the latest Rural Commodities Wrap, which this month focuses on wheat. NAB estimates the crop will come in at 20.6 million tonnes
The US economy is only growing at a modest rate. GDP grew by 0.5% qoq (or 2.0% annualized) in the September quarter, and we expect similar growth for the present quarter. Hurricane Sandy is a downside risk for December quarter growth; but upside risk for subsequent quarters.
NAB Commercial Property Index hits new low of -19 points in Q3 2012 as domestic economy passes through a soft patch with business conditions weaker and forward indicators concerning. Retail participants least optimistic, but expectations soften most in office and CBD Hotel markets.
The gold price rose by a spectacular 7 per cent over September. Some of the strength has subsequently been unwound, with the gold price easing to around US$1,710 per ounce in early November. We have lifted our forecasts a little
Bulk commodity prices have been mixed recently with coal prices generally stabilising around recent lows, while iron ore prices have performed surprisingly well, supported by recent signs of improvement in the Chinese economy. Growth in global crude steel production remains subdued
Australian online retail sales up 23 percent yoy in September, but the level is still modest compared to traditional sales. Domestic online retailers continue to innovate – in an effort to develop or maintain a competitive advantage.
US GDP grew by 0.5% qoq in the September quarter, stronger than in the previous quarter but still only modest. The strengthening in growth was due to consumption, housing investment and government spending picking up. Of concern, however, was a decline in business investment.
Metals prices received a significant boost over September, following a suite of policy stimulus announcements by some of the major central banks. In aggregate, base metal prices rose by 10 per cent over September but were 7 per cent lower than levels one year earlier.
Oil prices weaken in October but remain quite high. Attention now shifting towards the Asian economies, which have surprised markets on the downside in recent months. Near-term forecasts lifted on geo-political risk, 2013 forecasts left unchanged.
China’s economic growth decelerated for the seventh consecutive quarter. However, quarter on quarter growth came in stronger than expected and revisions to previous quarters suggest the near-term growth momentum has actually improved.
SME confidence and conditions better in Q3 but still below average; sentiment of SMEs now in line with their larger counterparts but activity, capacity utilisation and new orders continue to under perform. Strength in recreation & personal services and transport a consistent theme
This edition explores key topics and issues which have real potential for impact on manufacturers and the concept of optimisation in the context of business models, capital structure, funding profiles, working capital efficiency, approach to risk management and cost base.
The Manufacturing Activity Index was unchanged in Q3 – despite diverging trends in the index components – remaining at negative levels. The index indicates further falls in Manufacturing growth in the quarter, which remains burdened by global economic trends and the strength of the dollar
The first NAB Charitable Giving Index shows that charitable giving is growing, despite a softening domestic economy, flat employment growth and persistent consumer cautiousness. NAB and data analytics firm Quantium reviewed donations made by credit card, direct debit, BPAY and EFTPOS
Business conditions improve in the quarter but still soft. However, Monthly survey results suggest conditions weakened towards the end of the quarter. Forward indicators remain very weak. Confidence up a touch but still at downbeat levels – especially mining
Economic conditions in NSW are likely to improve only marginally over the coming year with conditions within the state likely to vary wildly. By all measures, the Victorian economy continues to under perform the national average, with SFD growth slowing to 2.1 per cent in 2011-12
GDP growth was only 0.3% qoq in the June quarter and partial indictors suggest that is was only slightly higher in the September quarter. This is consistent with the finding of the Federal Reserve’s ‘Beige book’ released this week.
Conditions recover and businesses take comfort from better sales, a lower AUD and talk of interest rate cuts. Global uncertainty still weighing on near-term activity indicators. Business conditions improved in September, after edging down over the previous two months, with the outcome suggesting that the Australian economy may be stabilising. However, there are still signs […]
NAB Residential Property Index turns positive in Q3’12 as property professionals see downward correction in national house prices slowing. Market expected to recover in the next year, with prices rising 0.4% nationally. Prices to rise in all states except Victoria.
Over September, minerals and energy prices have been assisted higher by central bank monetary easing and various other stimulus measures taken by policy makers around the world. Bad news has become good, and good news has become ‘bad’ for markets.
The latest business surveys suggest that conditions in the big advanced economies have stabilised after the softening in growth that took place since late 2011. Monthly trade and industrial indicators still point to a broad-based slowing across the emerging economie
Business confidence recovers modestly but still down beat – especially mining. Business conditions disappoint – with struggling retail and wholesale falling significantly. Forward orders noticeably weaker and capacity utilisation trending down - indicative of weakening demand.
Global economy slowing but recent advanced economy surveys show stabilisation. Broad-based slowing under way across emerging economies. Global forecasts a touch lower in 2013 but risks remain (US “fiscal cliff”). Australian economy softening to below trend amid restructuring stresses.
Growth in online spending remains strong - relative to the past year - with spending increasing by around +22% year-on-year in August. This level is slightly softer than in July. In the year to August 2012, Australians spent a total of $11.9 billion in online retail sales. This figure is equivalent to 5.4% of traditional bricks & mortar retail spending (excluding cafes, restaurants and takeaway food) for the year ended July 2012.
NAB’s Corporate Finance Insights reports utilise our expertise across a range of industry sectors to explore current issues, present forward looking views and opportunities for growth and progression. The report is published four times a year.
A monthly snapshot of NAB’s global and domestic economic outlook. The Bigger Picture – A Global & Australian Economic Perspective Global: The global economy is experiencing a broad-based slowdown with both the advanced and emerging economies reporting a softening in growth. Conditions vary between regions with recession in Western Europe, slowdowns in China, India and […]
We have changed our forecast and now see the RBA moving to cut the cash rate again in the coming months, probably by a cumulative 50 basis points; What has changed is that in recent weeks the RBA has signalled concern about the mix of the sustained drop in commodity and ongoing high AUD; Other […]
The Fed has announced further, aggressive, stimulus – extended forward guidance and a new round of QE. The Fed is also signalling that monetary policy stimulus will be maintained for longer than would normally be the case when the recovery strengthens. The latest indicators continue to suggest that the U.S. is experiencing only modest growth. […]
The IMF has revised down its forecasts of world growth, particularly for advanced economies. Its Australian forecasts have also been downgraded, to 1.8% in 2011 (from 3.0% in April – catch up after weaker than expected GDP in H1) and 3.3% in 2012 (from 3.5%). For 2011 NABs forecast is 1.9%, not materially different from […]
NAB’s Global Economic Research provides up to date commentary on global economic developments in the USA, Asia, New Zealand. China’s partial economic indicators for the month suggest that conditions haven’t quite stabilised as expected, but neither have they deteriorated significantly. Our previous expectation that economic growth would remain unchanged from Q2 now looks unlikely. Recent […]
The NAB Online Retail Sales Index provides key insights into online spending in the retail goods space, capturing domestic and international trends, as well as regional and age demographic trends. It’s a unique tool based on up to 2 million non-cash transactions per day, scaled up to replicate the broader economy. Online sales growth recorded […]
NAB’s Global and Australian Forecast provides a monthly snapshot of NAB’s global and domestic economic outlook. Global economy still slowing with softening across advanced and emerging economies. Growth set to pick-up in 2013 as worst economic risks averted. Australian economy still drifting through soft patch with falling commodity prices now weighing on mining. But investment […]
NAB’s Corporate Finance Insights reports utilise our expertise across a range of industry sectors to explore current issues, present forward looking views and opportunities for growth and progression. The report is published four times a year and explores topical issues facing Australian Corporates. Welcome to the May 2012 edition of Corporate Finance Insights. In this […]
Australia’s monthly survey of the current performance of the non-farm business sector, based on a survey of around 350 small to large sized companies. Includes a monthly update of the global and Australian economic outlook. Business conditions improve on the back of strengthening trading and profitability – especially in interest sensitive sectors. But confidence falls […]
Global economy slows with softening evident across advanced and emerging economies. Worst risks should be averted and global growth to pick-up slightly in 2013. Australian economy at trend but softening, while confidence helped by Euro-zone comments and lower interest rates. Labour market and orders still soft but activity to hold up sufficiently to circumvent need […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. Global growth weighed down by weakness in big developed economies, emerging markets also slowing Australian farm sector mixed but likely to benefit from US drought, which could add around $6 billion in export incomes to the […]
Drought has led to big downward revisions to US crop production. Impact on farm sector incomes will be mitigated by several factors, particularly the large expected increases in crop prices. However, these price rises will squeeze livestock and dairy producers. Farm sector will be a headwind to US GDP growth in 2012 similar to that […]
Partial economic indicators are starting to stabilise somewhat, but the overall trend in the data was disappointing for the month of July given our expectations for a slight improvement in economic growth over H2 2012. Industrial production softened further along with nominal retail sales, while export growth and bank loans were both well below expectations. […]
Australia’s monthly survey of the current performance of the non-farm business sector, based on a survey of around 350 small to large sized companies. Includes a monthly update of the global and Australian economic outlook. Business conditions worsen in the face of poor trading and profits, with weakness particularly evident in retail and wholesale – […]
US GDP grew by only a modest 0.4% (or 1.5% annualized) in the June quarter, a slightly lower rate of growth than in the previous quarter. The composition of GDP was not positive, with the inventory cycle likely to be a moderate headwind in the near term. We expect growth to be similar in the […]
US natural gas lift on winding down inventories (after seasonal adjustment), and increased consumption due to shift away from coal to gas in electricity generation for summer European prices weaken as increased Russian supplies, soft demand and reduced arbitrage opportunities to Asia see more LNG enter European natural gas market Prices in Asia Pacific surge […]
London 2012 Olympics upon us but the boost to gold demand from Australian athletes still quite limited. The gold price eased by 0.4 per cent over July, and following a rally late last week, has fallen back to around US$1,590 per ounce. It is difficult to know what direction the gold price will take in […]
Bulk commodity prices have fallen noticeably in response to poor demand for steel and electricity, and improving supplies of the commodities. Both coal and iron ore prices have fallen to around their lowest levels since late 2009, consistent with Chinese GDP growth which slowed to its lowest rate in over three years in the June […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month
US GDP grew by only a modest 0.4% (or 1.5% annualized) in the June quarter, a slightly lower rate of growth than in the previous quarter.
NAB’s Sector Insight reports utilise our expertise across a range of industry sectors to explore current issues, present forward looking views and opportunities for growth and progression. Our reports also include some perspectives from respected industry leaders in each edition. Welcome to our 2012 publication of Sector Insights: Transport & Logistics. In this edition, we […]
The NAB Online Retail Sales Index provides key insights into online spending in the retail goods space, capturing domestic and international trends, as well as regional and age demographic trends. It’s a unique tool based on up to 2 million non-cash transactions per day, scaled up to replicate the broader economy. With traditional sales totalling […]
NAB’s Sector Insight reports utilise our expertise across a range of industry sectors to explore current issues, present forward looking views and opportunities for growth and progression. Our reports also include some perspectives from respected industry leaders in each edition. Welcome to our inaugural issue of Sector Insights: Government. Both domestically and globally, in this […]
We headed along to the AMA annual conference recently held in Melbourne where Federal Health Minister Tanya Plibersek outlined the health reforms handed down in the 2012–13 Budget.
The Chinese economy continues to slow, albeit at a relatively controlled pace. Real GDP growth eased to 7.6 per cent, broadly in line with expectations, but the slowest pace in more than three years. Nevertheless, partial economic indicators are providing tentative signs of stabilising, with new loans increasing, while fixed asset investment and real retail […]
The recent softness in economic indicators continued over the last month, and now point to GDP growth in the June quarter being slightly weaker than the March quarter’s modest pace. While we still expect GDP growth to strengthen in the second half of the year we have trimmed our growth expectations for 2012 (from 2.2% […]
Business conditions improve slightly but overall activity remains soft; forward orders and employment conditions imply weak near-term demand. Confidence falls marginally, implying little relief from RBA rate cuts; European uncertainty and new taxes may be weighing on sentiment. Government handouts provide some respite to consumer dependant sectors but benefits may be short-lived – time will […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month.
Retail drives ASX 300 business conditions lower in Q2, with a weaker trend tipped for Q3. Business conditions deteriorated across the economy in the second quarter of 2012, with declines recorded among firms in both the ASX 300 survey and the broader Quarterly Business Survey (QBS). ASX 300 firms recorded a net balance of 0 […]
The NAB Manufacturing Activity Index provides detailed analysis of activity in Australia’s manufacturing sector and has been constructed to replicate quarterly movements in activity within the sector. The Manufacturing Activity Index* eased further in Q2, remaining in negative territory – despite some divergent trends in individual sub-sectors. The index implies declines in quarter-on-quarter growth in […]
NAB’s Sector Insight reports utilise our expertise across a range of industry sectors to explore current issues, present forward looking views and opportunities for growth and progression. Our reports also include some perspectives from respected industry leaders in each edition. Welcome to our June 2012 edition of Sector Insights: Retail. The Australian retail sector has […]
NAB takes a closer look at the growing economic integration of the Australian economy to growth in the Chinese economy. Australia’s growth is becoming increasingly sensitive to the strength of the Chinese economy China’s growth looks to be heading towards a soft landing But what would happen if growth is de-railed? It seems likely that […]
The NAB Quarterly SME Survey covers conditions in small, medium and emerging businesses (SMEs) across all parts of the non-farm business sector in Australia. SME confidence & conditions deteriorate further. Weakness in small firms increasingly pronounced compared to their larger counterparts – weakness in manufacturing, retail and construction a persistent theme across all small firm […]
NAB’s Quarterly Australian Residential Property Survey focuses on conditions in the Australian residential property market. NAB’s Residential Property Index fell in the June quarter, weighed down by weaker conditions in Victoria and NSW. The national housing market is expected to remain soft over the next year with property professionals predicting a -0.7% decline in house […]
NAB’s Quarterly Agribusiness Survey covers economic and business conditions in Australia’s post farm gate agribusiness sector. Post farm gate business conditions weaken through June. Post farm gate agribusiness conditions decline further in June, due mostly to a large fall in customer confidence Medium term expectations continue to wind back, pulling capex expectations along with them […]
NAB’s Commercial Property Index slips to a new low of -16 points in Q2’12 as fewer property professionals expect positive capital or income returns. Retail and industrial market participants are very pessimistic, but expectations are also softer in office and CBD hotel markets. WA is the most optimistic state in nearly all sectors and Victoria is […]
NAB’s Sector Insight reports utilise our expertise across a range of industry sectors to explore current issues, present forward looking views and opportunities for growth and progression. Our reports also include some perspectives from respected industry leaders in each edition. Welcome to the June 2012 edition of Property Insights. It’s hard to believe it is […]
Under current law there will be a large fiscal contraction in the United States in 2013. If it went ahead it could significantly impact the economy. However, experience suggests that many of the spending cuts and tax increases will be deferred. We expect the fiscal headwind in 2013 to be similar to that of 2012. […]
Commentary and forecasts on key non rural commodities - minerals and energy.
In aggregate, base metal prices fell by 4 per cent over May and were 19 per cent lower than levels one year earlier. Currently, prices for most base metals are below their May averages. Metals prices have been volatile as a result of events in Europe and growth concerns in China and the US. Relief […]
Oil prices continue to soften on ongoing concerns surrounding the Euro-zone, Spanish bond yields rising above 7 per cent and softening US and Chinese economic activity Oil price forecasts revised down, reflecting ongoing market concerns surrounding the Euro-zone, weaker growth forecasts for the US and China and easing supply-side concerns Global crude oil market loosening […]
Business conditions weaken; forward orders and other indicators of near-term demand still soft. Confidence slips further, with heightened European uncertainty seemingly outweighing relief provided from RBA rate cuts – new taxes may also be weighing on sentiment. Business conditions weakened in the June quarter, following modestly better activity over recent quarters. Official ABS data suggest […]
The PBoC cut benchmark lending and deposit rates by 25bp this month in response to a clear moderation in inflation and soft demand conditions. Domestic demand may receive support from recent stimulus measures, but global uncertainty (particularly in Europe) will continue to pose headwinds. The partial economic indicators for May continued to be relatively soft, […]
Business conditions now the weakest in three years: mining and construction down sharply. Confidence falters on global Greek exit fears, weak orders and negative reaction to the May Budget. Indicators of demand imply softer near-term activity and more jobs shedding in weak sectors. RBA to cut again in coming months. Business confidence deteriorated sharply in […]
The recent weakness in jobs growth continued into May. It is probably, in part, a correction to the surprisingly strong growth in early 2012. Indicators suggest that June quarter GDP growth will maintain the previous quarter’s modest pace. While we still expect GDP growth to strengthen in the second half of the year we have […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. Global agricultural commodity prices come under pressure as European concerns sees heightened financial market volatility Australian poultry industry on firm footing, buoyed by rising productivity and solid growth in per capita consumption Decline in domestic pig meat […]
The NAB Online Retail Sales Index provides key insights into online spending in the retail goods space, capturing domestic and international trends, as well as regional and age demographic trends. It’s a unique tool based on up to 2 million non-cash transactions per day, scaled up to replicate the broader economy. Online sales growth continued […]
Partial indicators for April were disappointing across the board relative to optimistic market expectations, but we remain happy with our longheld views for China’s growth outlook. Slowing activity has been driven by both an easing in domestic demand, and weak external demand – global economic uncertainty, particularly in Europe, is likely to provide an ongoing […]
US GDP grew by 0.5% (or 2.2% annualized) in the March quarter, confirming that the US economy is growing at a modest-to-moderate pace. We expect GDP in the current quarter to grow at a similar rate to the March quarter and then strengthen in the second half of the year. We have left our forecasts […]
Businesses remain confident of better near-term activity but actual conditions weaken in April – with multi-speed element widening again. Forward indicators remain lacklustre, with a material decline in capacity utilisation signalling increased slack in the economy – and further weakness in the labour market ahead. More rate action to come, although how much depends on […]
The NAB Online Retail Sales Index provides key insights into online spending in the retail goods space, capturing domestic and international trends, as well as regional and age demographic trends. It’s a unique tool based on up to 2 million non-cash transactions per day, scaled up to replicate the broader economy. The value of the […]
NAB’s Sector Insight reports utilise our expertise across a range of industry sectors to explore current issues, present forward looking views and opportunities for growth and progression. Our reports also include some perspectives from respected industry leaders in each edition. Welcome to our inaugural issue of Sector Insights: Energy & Utilities. We are pleased to […]
US GDP grew by 0.5% (or 2.2% annualized) in the March quarter, confirming that the US economy is growing at a modest-to-moderate pace. There was mixed news on the composition of GDP with inventories making a further contribution to growth and business investment declining. However, consumption and housing investment were strong and there was a […]
Which Australian industries are peaking this year? IBISWorld General Manager, Karen Dobie, dissects the research.
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. Global agricultural commodity prices under pressure from resumption of ‘risk-off’ attitude pervading financial markets Australian wheat crop of 26.1 million tonnes predicted on good subsoil moisture, but acreage lost to canola Wheat prices […]
The Chinese economy decelerated further at the start of 2012, with real GDP growth at its slowest pace in around three years (rising 8.1 per cent over the year to the March quarter – NAB forecast was for 8.2 per cent). By component, consumption made the largest contribution to growth over the year, while investment […]
The most comprehensive survey of current performance as well as near-term and medium-term expectations of the non-farm business sector, based on a survey of around 1,000 small to large sized companies. Business conditions edge higher but lack of jobs growth likely to keep near-term activity fairly soft. Confidence slips back and remains below trend. Forward […]
Growth slowed considerably in the Asian Tiger economies late last year and remains relatively sluggish in 2012. However, some partial indicators suggest that conditions have improved modestly more recently, bolstered by improvements in the US economy, and an apparent v-shape recovery in Thailand from last years floods. However, demand for exports from advanced economies is […]
It is too early to say that the disappointing March jobs outcome signals a shift to a much slower pace of jobs growth but some downwards correction was expected.
Confidence and conditions grind higher but with little jobs growth. Forward indicators marginally improve but remain subdued. Multi speed economy still to the fore – with non mining edging up a touch. Domestic forecasts edge lower with unemployment up. Rates view unchanged. Businesses appeared slightly more confident about near-term activity in March than in February, […]
The NAB Online Retail Sales Index provides key insights into online spending in the retail goods space, capturing domestic and international trends, as well as regional and age demographic trends. It’s a unique tool based on up to 2 million non-cash transactions per day, scaled up to replicate the broader economy. Growth in online sales […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month.
NAB’s Quarterly Agribusiness Survey covers economic and business conditions in Australia’s post farm gate agribusiness sector. Post farm gate business conditions pull back in early 2012 Post farm gate business conditions fall on lower product prices, availability of materials and labour, falling export sales Medium term expectations pull back as recent results see sector become […]
The NAB Quarterly SME Survey covers conditions in small, medium and emerging businesses (SMEs) across all parts of the non-farm business sector in Australia. Seasonal adjustment of SME survey results SME survey data reported in the March 2012 NAB Quarterly SME Business Survey have been seasonally adjusted for the first time in the history of […]
If the Fed undertakes another round of Quantitative Easing it may be ‘sterilized’. That is, the Fed would ensure there is no increase in bank reserves, either through using reverse repurchase agreements or auctioning term deposits to banks. Reverse repos or term deposits are a form of shortterm borrowing. Under unsterilized QE, the asset purchases […]
Australian economic commentary on a state by state basis. NSW Following a relatively sluggish year, the growth momentum in NSW appears to be lifting, with SFD increasing by 0.8 per cent in the December quarter. Importantly, NSW appears to have an investment driver with business investment lifting in the December quarter, buoyed by a solid […]
Confidence retreats while conditions edge higher. Forward indicators remain weak. Retail, manufacturing and construction still struggling while services, transport and mining strong. Growth lowered locally. Businesses appeared less confident about near-term activity in February than in January. While overall confidence remained positive, uncertainty emanating from the euro-zone and financial markets, the persistent strength in the […]
The impact of the Euro-zone financial unrest to the healthcare industry is increasingly affecting importing and exporting decisions of Australian healthcare businesses. Economic backdrop Currency markets continue to be volatile, notes Mike Bligh, NAB Head of Specialised Business, Business Markets and Wholesale Banking, and “significant swings are becoming a daily event. We recently saw the […]
NAB’s Corporate Finance Insights reports utilise our expertise across a range of industry sectors to explore current issues, present forward looking views and opportunities for growth and progression. The report is published four times a year and explores topical issues facing Australian Corporates. Welcome to the second edition of Corporate Finance Insights. In our first […]
The NAB Online Retail Sales Index provides key insights into online spending in the retail goods space, capturing domestic and international trends, as well as regional and age demographic trends. It’s a unique tool based on up to 2 million non-cash transactions per day, scaled up to replicate the broader economy. Online sales strengthen in […]
India accounts for around 5% of exports from Australia and 2% from New Zealand, mainly comprising a narrow range of commodities. After growing strongly since 2000, shipment values from Australia fell in 2011. India is one of the biggest Asian locations for Australian bank lending with around $US6½ Billion outstanding in the latter half of […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. Agricultural commodity prices easing further on increased production, AUD impact on livestock markets Sluggish global consumption growth, increased competition from South America and South Africa impacting Australian wine exports Domestically, Australian wines under increasing pressure from rising import […]
Confidence and conditions a touch better but economy still marking time. Sectors remain wide apart. Inflation weakening as retailers increase discounts and one more rate cut possible. Overall business confidence was relatively firm in the month, with businesses seemingly still taking relief from the recent RBA rate cuts as well some abatement of concerns about […]
The most comprehensive survey of current performance as well as near-term and medium-term expectations of the non-farm business sector, based on a survey of around 1,000 small to large sized companies. Despite better business conditions and improved confidence, survey still only suggestive of an economy growing at around trend. Forward indicators slightly better, implying a […]
Confidence up a touch in December, despite global economic worries. Conditions consistent with an economy going sideways – but multi- speed. GDP forecasts lowered & two rate cuts now expected in 2012. Business confidence strengthened a little in December, although it remained below the series long-run average. Business sentiment over recent months has been seemingly […]
The NAB Online Retail Sales Index provides key insights into online spending in the retail goods space, capturing domestic and international trends, as well as regional and age demographic trends. It’s a unique tool based on up to 2 million non-cash transactions per day, scaled up to replicate the broader economy. In a fast-changing environment, […]
New World Bank projections show 2012 global growth slowing to only 2½%, well below NAB’s 3¼% forecast. The difference is largely illusory and reflects how forecasts are compiled. On a comparable basis NAB forecasts are slightly lower than the World Bank’s. For further analysis download the full report. Difference over global outlook more apparent than […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. Agricultural commodities hit record levels in 2011, to ease in 2012 on massive production response. But considerable risk remains based on weather and Euro-zone debt crisis. Prices for agricultural commodities managed to pick up significantly in 2011, […]
The ASX 300 Quarterly Business Survey captures the views of the ASX 300 business community and is a key peer comparator for companies. The report shares business and sector insights, and an understanding of economic confidence for the quarter. Strong rebound in business confidence for ASX300 firms – exceeding the broader economy; business conditions record […]
The NAB Quarterly SME Survey covers conditions in small, medium and emerging businesses (SMEs) across all parts of the non-farm business sector in Australia. SME confidence and conditions rebound but still below levels of their larger counterparts. Low tier (smallest) SMEs struggle. SME firms reported improved confidence in the December quarter – especially compared to […]
NAB's Quarterly Agribusiness Survey covers economic and business conditions in Australia’s post farm gate agribusiness sector.
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. Agricultural commodities weakening on Euro sovereign debt crisis, rising production prospects Wool prices hit by weakening demand prospects, but still relatively high Australian wool production to rise 3.1 per cent in 2011-12 but exports to remain […]
Conditions improve slightly in November and are consistent with an economy growing around trend. Services sectors (ex. finance) and retail doing better. Confidence overall relatively stable – despite European concerns. GDP revised up on mining & consumer strength. Business conditions edged higher in November, after softening a little in the previous month, and are consistent […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month.
Conditions soften in October, suggesting growth in the economy is treading water. But, for the second month in a row, confidence has improved. Also tentative signs of Qld re-construction kicking in. Business conditions softened in October, partly unwinding an improvement in conditions in the previous month, with trend conditions suggestive of an economy that is […]
The NAB Quarterly Business Survey is the most comprehensive survey of current performance as well as near-term and medium-term expectations of the non-farm business sector, based on a survey of around 1,000 small to large sized companies. Business conditions slump and confidence falters mid-quarter, but monthly profile points to subsequent improving trend. Hours worked strengthens […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month
The ASX 300 Quarterly Business Survey captures the views of the ASX 300 business community and is a key peer comparator for companies. The report shares business and sector insights, and an understanding of economic confidence for the quarter. Business conditions for ASX300 declined further in Q3 – driven by manufacturing – narrowing the gap […]
The NAB Quarterly SME Survey covers conditions in small, medium and emerging businesses (SMEs) across all parts of the non-farm business sector in Australia. Subdued SME conditions persist and confidence falls further. Business confidence of SMEs fell heavily in the September quarter, consolidating a sharp decline in the June quarter and consistent with the deterioration […]
NAB’s Quarterly Agribusiness Survey covers economic and business conditions in Australia’s post farm gate agribusiness sector. Post farm gate conditions improve after plunging through 2011 Post farm gate business conditions improve but still remain weak High commodity prices and weak customer demand continue to squeeze post farm gate agribusiness sales margins Capacity utilisation collapses in […]
Commentary on labour productivity growth. Labour productivity growth has slowed markedly in recent years, prompting calls for further economic reform. There is evidence that the mining and utilities industries may have been responsible for around half of this slowdown. This may reflect delays in high levels of new investment coming on stream and the strength […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. • Commodity prices weaken on risk-off attitude hitting global markets, but fundamentals still point to solid prices for agricultural commodities • Sugar prices set to weaken as solid crops in India, EU and Russia come online […]
Global jitters jolt confidence. But could have been worse given global turmoil. Business conditions only a touch weaker – but with further restructuring evident in a widening of the multi-speed economy. Business confidence dropped sharply in August, with heightened global uncertainty, large falls in equity markets and the fear of debt market contagion. Confidence deteriorated […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. Australian wheat crop downgraded to 21.8 million on dryness in northern NSW, Queensland Beef prices to fall in near term on weakness in Japan, US and high AUD but recover in medium term on tight global […]
Business conditions weaken showing an economy continuing to lose momentum and traveling below trend. Confidence remains subdued in the face of continuing uncertainty – but carbon didn’t appear to cause further retreat. Growth in the domestic economy weakening in July, with business conditions now indicative of below-trend growth. This weakening trend was broad based – […]
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