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NAB business confidence at lowest level since Australian pre-election

FXStreet (Bali) - Australia's NAB business confidence (Sep) came at 5 vs 8 last, with NAB business conditions (Sep) at 1 vs 4 last.

Key Points (NAB)

"Business confidence lost ground in September –lowest level since pre election - in the face of a persistently soft operating environment for many firms. Forwardorders remained soft, prompting de-stocking and competitive pricing which appears to have weighed on profitability. Confidence varies significantly across industries, with services firms the most optimistic."

"Business conditions fell again in September bringing the index back to its lowest level in 4 months and confirms our expectation that the (narrowly based) jump in July would be short lived. Most industries recorded a drop in September, although transport & utilities were surprisingly strong (falling oil prices and removal of carbon tax?). Forward orders eased again, implying Q3 domestic demand will remain soft. Capacity utilisation also fell noticeably."

"A drop in profits and employment drove conditions lower, with the latter moving significantly into negative territory – in contrast to some other labour market partials. Forward indicators are soft, but trend conditions in the ‘bellwether’ wholesale industry are a little less weak. Our wholesale leading indicator implies soft underlying conditions and below trend growth in Q3."

"GDP forecasts revised down modestly: 2014/15 2.8% (was 2.9%) and 2015/16 3.2% (was 3.4%). Unemployment rate still to peak at around 61⁄2%. No change likely in cash rate until near the end of 2015."

Australia National Australia Bank's Business Conditions down to 1 in September from previous 4

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