VIEW: NAB: No Change In View After Recent Data

In the wake of the labour market report NAB note that 2today’s strong outcome bucks the trend slowing in employment growth over recent months, which was difficult to square with still very elevated labour demand indicators and employment intentions in the NAB Business Survey. It may mean there could be some catchup in official employment growth in the months ahead. Overall today’s data is a strong report, and while not inconsistent with the RBA’s near-term outlook, does skew the risks towards stronger near-term outcomes on the labour market and wages. In the context of the strong WPI print yesterday, the case for 25bp hikes in December, February and March, as is NAB’s call, looks even firmer. Although we expect 25bp, we also think the RBA could again debate the merits of a 25 vs 50bp rise at the December meeting.”