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AUD: NAB business survey fails to spark RBA’s rate cut hopes - TDS

FXStreet (Delhi) – Prashant Newnaha, Rates Strategist at TD Securities, notes that there is nothing in today’s NAB Business survey to suggest the RBA needs to cut rates.

Key Quotes

“Although NAB Business Confidence dropped from 5 to 2 and new orders hit the lowest levels since Dec 2014, Conditions were unchanged at 9, trading, profitability were little changed and employment was positive for a 2nd month, a positive read through for Employment on Thursday. Service sectors reported more favourable conditions, but mining, manufacturing and wholesale were neg. With Biz Conditions stable at 9 and well above post GFC average of 2, it suggests the transition from the mining economy is taking place. RBA rate cuts are unlikely, on hold policy more likely.”

“No market impact from today’s Housing Finance release, but the data split was pleasing - headline for Sep rose 2%/m, exceeding TD and the market’s forecast for a flat outcome. This suggests building approvals could remain firm for longer. The regulatory curbs on lending to investors has had a clear impact, value of loans made to investors dropping 8.5%/m (largest fall in 7 years), to be down 2%/yr. In contrast value of loans to owner occupiers rose 3%/m, from the prior 4.3%/m gain, with lending to owner occupiers now up 23%/yr. A positive offset.”

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