An Important Week For RBA Thinking

This week a lot of forward-looking data are published, including details on labour market and inflation trends which will be important for the RBA outlook.

• CBA Household Spending Intentions for September are released on Tuesday and have been showing continued strength in line with retailers’ anecdotes but in contrast to consumer confidence. They rose 0.8% m/m in August, their fourth consecutive monthly increase, to be 15.1% y/y. They will be watched for signs that rate hikes are beginning to hurt.
• Westpac consumer confidence for October also prints on Tuesday. It showed signs of bottoming out in September at depressed levels, but was supported by labour market confidence. The October survey is likely to be watched for signs that employment optimism is waning. Confidence could be hit by the return of the fuel excise and further rate hikes.
• The final release on Tuesday is the September NAB business conditions survey. The August data showed positive business conditions and elevated cost pressures. The employment, labour costs and price components will be a particular focus to assess trends in “wage and price-setting behaviour”.
• HIA September home sales are published on Wednesday. They fell 16% m/m last month and are a lead indicator of house price developments. Further weakness is expected.
• Finally, Thursday sees Melbourne Institute Inflation Expectations for October. The series moderated in September but could rise again this month on higher petrol prices.