Is February in the running for an RBA hike?
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Why is the RBA considering a February rate hike?
Well, the concern of the RBA was capacity utilization. Was it getting to the stage where it could be inflationary? And the NAB business server yesterday showed it got higher. So February. Now a possibility that the RBA is going to lift rates. Still an outside chance, but it's there. We'll look at the market's view of that uh on the podcast today. And the Fed and the Bank of Canada just around the corner as well. It's Wednesday, it's the tenth of December twenty twenty. twenty five. It's the morning call from Nab. Good morning. Well, US equities are up this morning, but not by much, just naught point two percent for the Nasdaq. The S Ps hardly moved, but the DAX up almost half a percent and up two thirds of one percent for the CAC carant in Europe.
Very small moves in bond yields today, scarcely worth mentioning if we're looking at today versus yesterday. That is a bit of movement during the day. Uh well, also that five basis point rise in Aussie ten years yesterday to four point seven five percent and up a another. Four basis points on futures overnight. A small rise in the US dollar. It's up 0.2%.
What did the NAB Business Survey reveal about confidence and capacity utilisation?
So is the Aussie dollar to just below 66.4 US cents, a 0.6% fall in the yen. Oil is down 1.2% for WTI, 1% for Brent, which is now below 62% a barrel. We've got a 4.6% lift in silver, uh pushing over 61 an ounce on ComX this morning. New record there. And Bitcoin, if you're wondering, up three point two percent. So here's uh Nab's Sky Masters. Look, lots of Australian news for yesterday to talk about, including the NAB Business Survey, uh, down from six to one for confidence. Uh so a lot of the gains we've seen over the last six months have disappeared, presumably because rates aren't coming down as fast as uh businesses at thought.
Yeah, look you did see um as as you said, Phil, you did see uh a a sizable shift down in in um the confidence reading from that NAB business survey. But I'd suggest like uh you know, don't want to read too much into one one print, um and you know, we'll we'll see what happens happens next month. But we also did see a drop in conditions as well. That index um shifted down from From ten to seven and you you did see a fallback. Um the fallback was sort of broadly based across across all all sectors. Um so a little bit of softness in the business survey. But but overall um if you look at the conditions level at seven, um it is low lower on the month, but it does remain um elevated and it it and it remains near its long run trend.
So I so I think overall still still pointing to um you know c conditions being being okay across across businesses within the detail um you know what you did see you did see some falls in profitability and trading and that more more than offset uh a minor gain in in employment. But I think the other thing to to focus on in the business survey was the capacity utilization measure.
How is the capacity‑utilisation measure influencing inflation risk?
Yeah. Um And And that's
actually with saying that, you know, the economy y you know, businesses are doing quite well. I mean that sounds like good news, but it's also bad news 'cause obviously that will push that capacity utilization figure up.
Yes, so so the measure did did lift um and it reached its highest level in in eighteen eighteen months. And so it does continue to say that the economy uh remains um capacity constrained and you've got six out of the eight industries uh running above their respective long long run averages. So, um, you know, the risks yeah, we've talked about it before, Sally's talked about it, but you know, the risks here are that is if ec economic growth um continues or accelerates further Then you know the risk is is does that put pressure on on prices? And this is clearly something which um the RBA sort of did note in their in their post meeting statement yesterday.
Yeah, definitely more hawkish, wasn't it? Not a surprise, actually. You know, the decision to keep rates on hold was unanimous. That wasn't a surprise. The wording in the statement about monitoring the risk of a pickup inflation. Uh so I mean it all does rest on the February meeting.
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Chapters
7 chapters
1
Why is the RBA considering a February rate hike?
0:01–1:01
2
What did the NAB Business Survey reveal about confidence and capacity utilisation?
1:01–3:00
3
How is the capacity‑utilisation measure influencing inflation risk?
3:00–6:05
4
Why have markets suddenly repriced RBA expectations for February?
6:05–9:28
5
What do the latest JOLTS job‑opening numbers say about the US labour market?
9:28–12:24
6
How likely is the Fed to cut rates at its upcoming meeting?
12:24–13:33
7
Which upcoming data releases could change the RBA’s February outlook?
13:33–13:36