Following the plunge in the 'employment' component of the NAB business survey, and ahead of today's jobs data, Citi on the Reserve Bank of Australia
ICYMI....
- ICYMI - Australian business confidence 0 (prior -1) and conditions 3 (prior 7)
- More from the NAB business survey (on jobs and the RBA)
And, for today, due at 0130GMT:
- Employment Change: expected 15K, prior 25.7K
- Unemployment Rate: expected 5.0%, prior 5.0%
- Full Time Employment Change, prior was 48.3K
- Part Time Employment Change, prior was -22.6K
- Participation Rate, expected is 65.7%, prior 65.7%
- Australian labour market report due Thursday 16 May 2019 - preview
OK, on to Citi:
- NAB business confidence in April is flat and the lowest reading in over 4 years though some of the weakness may be related to pre-election uncertainty (Federal election is held this Saturday).
- Most importantly though for the RBA, employment conditions are negative for the first time since August 2015.
And what it means for the RBA:
- the last time business confidence was at this level, the RBA cut the cash rate by 25bps.
- this data on its own is unlikely to promote policy action
- RBA will want to see what happens to the unemployment rate
- there is the prospect of post-election fiscal stimulus worth around ¾pp of GDP
- expect the RBA to cur in August, 25bps
