Sean Aylmer

So the business confidence actually lifted 10 points to minus 14 index points.

Now that was driven by gains in mining, wholesaling and transport.

I mean, minus 14 points, confidence is firmly negative.

Business conditions were unchanged at plus three index points, but that does sit below the long-run average.

As trading conditions, employment and profitability all softened, profitability remains the weakest component, reflecting ongoing margin pressure across the economy.

The National Australia Bank monthly survey has a great record of judging how businesses are feeling and what that means for economic growth.

So that's one to look at.

I mean, it's a fair question.

Probably the way to think of it is relatively.

So consumers are even more pessimistic now than they were a year ago, much more than average over the long term.

So yeah, it does matter.

As far as what it means for interest rates, I think the Reserve Bank is mostly concerned about inflation at the moment.

It wants price growth to come down before it worries too much about sentiment, be that business or consumer.

Having said that, National Australia Bank yesterday scrapped its forecast for an August interest rate rise.

It said the Reserve Bank's next move is more likely to be a cut as economic momentum slows and financial conditions tighten.

The timing's unclear, but Chief Economist Sally Auld, who's got a good record in predicting interest rates, says she has greater conviction that the next move in rates is down.

Yeah, yeah.

Yes.

Generally, the more defensive stocks did best.

Telcos, consumer staples, healthcare.