NAB Business Confidence data for August is the focus for Australian economic data due today, but before that ...
2305GMT Luci Ellis, Head of Financial Stability Department at the Reserve Bank of Australia, speaks on "Property Markets and Financial Stability: What We Know So Far"
Her comments will be watched by the local market. There is a house price boom going on in Australia's two biggest cities (Sydney and Melbourne). The concern for the RBA with the strong climb in prices (and the accompanying strong rise in borrowing) is that should prices fall back rapidly (in the form, for example, of a bubble burst), there will be an impact from continuing high debt repayments on household spending (i.e. a reduction in household spending) and an impact on the economy. It's a financial stability concern.
A lot of traders fail to take into account the 'third mandate' of a central bank, which is financial stability (the two everyone knows about are inflation and employment ... ). So far the response from the RBA to the boom in Sydney and Melbourne have been to use non-interest rate tools ... but the threat of an interest rate response is always present (even though not likely in the short term, IMO).
2330GMT: ANZ Roy Morgan weekly Consumer Sentiment,
- prior was 113.3
0130GMT - National Australia Bank business confidence and business conditions for August
- Business confidence, prior was 4
- Business conditions, prior was 6
Last month saw a dip in confidence after a strong surge in June. NAB says "Looking through the month-to-month volatility, however, both conditions and confidence are suggesting a turnaround in the non-mining economy". We'll get an idea on this today. The ongoing turmoil in China (markets and the economy) may very well weigh on Australian business sentiment further.
