It is going to be very hard for the Reserve Bank to hike after the raft of data that was just released.
Here is a quick Snapshot:
- RP Data-Rismark house Prices -0.1% mom raw and -0.3% seasonally adjusted
- Building Approvals -1.3% mom and -11.5% yoy. Slighthly better than market expectations but hardly rosy. Private housing continues to slide.
- Current Account deficit, bigger than market expectations, at negative 10.447 billion.
- Net exports, -2.4%. This is a huge drag on growth for the quarter with the market only looking for -1.1% (wrong again boys) and pulls the likely GDP growth rate for the quarter well below zero.
- Private sector credit growth, 0.0% mom and 3.3% yoy.
All in all these data speak of a challenged economy with growth that is too narrowly focused.
It is too soon for the RBA to hike on this, yesterday’s and the recent run of data.
The SoMP was a warning to complacency on the interest rate outlook for the market but the data is a warning to the RBA of the risks of hiking too far or hard.