Australia Business confidence (May) -4 (prior 0) and Conditions +8 (prior +14)

National Australia Bank Business Survey for May 2023. Not a good report. Confidence and conditions both dropped. these are the two headlines to the report.

Demand growth is being hit by RBA rate hikes, which is what the Bank is trying to do given they can't imp[act supply chains with the tools they employ.

• slower gains in sales (+14 in May from +22 in April) and employment (+4 in May from +11 in April)
• forward orders is viewed as a leading indicator of demand, fell to -5

For inflation, not good signs:

• labour costs rose to +2.2% q/q, from 1.9% in the previous survey - this is an inflationary pressure
• purchase costs 2.5% from 2.2%, also an inflationary pressure

NAB comments:

• "With the easing in business conditions accelerating and forward orders falling sharply, there is a growing risk that the RBA’s attempts to maintain an even keel 'run aground',"
• "The trend over coming months will be important as the RBA tries to assess whether it has done enough and if underlying inflation pressures are easing in a timely way."

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NAB conducts both a monthly business survey and a quarterly survey.

• both surveys aim to provide insights into the state of the economy and the performance of businesses

There are some key differences between the two, apart from the obvious (frequency of data collection and timeliness of release) a key difference is scope of coverage:

• The monthly business survey is focused on providing a timely snapshot of the business environment in Australia. It covers a wide range of sectors and provides data on business conditions, business confidence, sales, profits, employment, and other key indicators.
• The quarterly survey is more in-depth. It includes more detailed questions on specific topics such as investment intentions, borrowing, and exports.
• The quarterly survey has a larger sample size.

While both surveys provide valuable insights into the current state of the economy, the quarterly survey is better suited for identifying longer-term trends. This is because it includes more detailed questions on investment intentions and other forward-looking indicators that can provide insights into future economic activity.

China stimulus will be welcomed by Australian exporters, from Monday:

• ForexLive Asia-Pacific FX news wrap: More Chinese banks cut deposit rates
• People's Bank of China cuts 7 day Reverse repo rate to 1.90%, from 2%

aud AUD The Australian dollar (AUD) is the official currency of Australia, which is also used in Christmas Island, Cocos (Keeling) Islands, Norfolk Island, as well as independent pacific states.Introduced in 1966, the AUD is currently the fifth most traded currency in the world, behind only the US dollar, euro, Japanese yen, and British pound.The currency is very important to forex markets and is routinely used as a carry trade against other majors.The Reserve Bank of Australia (RBA) is the central bank The Australian dollar (AUD) is the official currency of Australia, which is also used in Christmas Island, Cocos (Keeling) Islands, Norfolk Island, as well as independent pacific states.Introduced in 1966, the AUD is currently the fifth most traded currency in the world, behind only the US dollar, euro, Japanese yen, and British pound.The currency is very important to forex markets and is routinely used as a carry trade against other majors.The Reserve Bank of Australia (RBA) is the central bank Read this Term