September 04, 2024 at 11:41PM
I posted earlier in the week on Bullock speaking today. ICYMI, she is speaking twice:
At noon local time, Bullock will address The Anika Foundation, Sydney
0200 GMT, 2200 US Eastern time (Wednesday evening)
At 7 pm Sydney time Bullock will speak in a Fireside Chat (pre-recorded) at the Women in Banking & Finance Awards
0900 GMT, 0500 US Eastern time
The topic of her speech today is “The Costs of High Inflation”.
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I also posted earlier that we have heard from Bullock a couple of weeks back at the Australian parliament:
More RBA Gov Bullock – don’t see interest rates coming down quickly
AUD/USD maintaining its session highs after RBA Governor Bullock hawkish again
RBA Governor Bullock: Don’t expect to be back in 2-3% target range until end of 2025
And in the minutes of the August meeting:
RBA minutes: Possible cash rate will stay steady for an extended period
I strongly suspect unchanged messaging from Bullock this week along the lines:
ruling out a near-term cash rate cut
RBA eyes are on preserving gains in the labour market
services inflation remains high and sticky
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Since writing that we’ve had poor data from Australia just yesterday:
Australian Q2 2024 GDP +0.2% q/q (expected +0.3%)
Consumer spending declined by 0.2% in the April – June quarter. This is the largest drop since the Global Financial Crisis (excluding the COVID-19 pandemic period). This is going to be particularly concerning for the RBA given strong population growth, which increased by 0.6% in Q2, the second-largest quarterly rise on record. The extended weakness in consumer spending is beginning to impact the business sector, with investment growing by just 0.1% for the quarter and 2.2% annually in Q2—a slowdown from the 4.5% annual growth in the March quarter.
And, it doesn’t take much digging into the figures to see that GDP growth was propped up by government spending. Separately, jobs growth in Australia, too, is being supported by the government sector.
While expectations have drifted to early 2025 for an RBA rate cut, any fall in inflation will be jumped upon by the Bank to cut rates, IMO. Boffins at the Reserve Bank of Australia are not unaware of the weakness ion the Australian economy, and a further weakening risks gains made in the jobs market.
This article was written by Eamonn Sheridan at www.forexlive.com.
