With the RBA's focus on the labour........>

AUSTRALIA: With the RBA's focus on the labour market lets take a look at the

labour component of the NAB survey.

- NAB write "business conditions have fallen to 3pts, returning to the low

reached in December. Driving the fall was a sharp 7pt decline in the employment

index to -1pt, the first negative print since early 2016. Alongside declining

job ads, these data suggest labour market conditions have turned, adding to the

downside risk to the RBA's optimistic outlook for unemployment.

- The employment index declined relatively sharply in the month and is now below

average. Over recent months, the employment index had been one of the few

positive indicators in the survey. While this is a worrying sign, we will watch

future observations to see if this fall is reversed or if in fact it is

signalling a slowing in the labour market.

- Overall, price pressures remain weak across the costs variables (including

wage bill growth), suggesting that in addition to a slowing in the pace of

activity in the business sector, there still remains spare capacity in the

labour market.