NAB Survey Shows Australian Business Conditions Hit 6-Year Low

Macro
โดย InfoQuest·AU·Read original
Summary · why it matters

National Australia Bank (NAB) released its survey results today (Sept. 8), indicating that Australia's business conditions index fell by 5 points in August to -1 point, marking the first negative reading since the COVID-19 pandemic in 2020 and the lowest in six years. The main factors were soaring costs that heavily squeezed corporate profits, coupled with concerns among businesses that the central bank might raise the policy interest rate again. The business confidence index fell by 1 point to -8 points, significantly below the long-term average of +5 points. Moreover, nearly all sectors experienced a broad slowdown, with the profitability index plunging by 10 points, while the sales index dropped by 5 points to its lowest level since the post-COVID period. NAB noted that the decline in the profitability index warrants close monitoring as it serves as a leading indicator for the overall labor market. It added that the overall survey results clearly signal that the economy is slowing down, while cost pressures and prices continue to weigh. Additionally, cost indicators remained elevated, particularly fuel prices, which rose in August following another escalation of tensions in the Middle East. NAB further pointed out that input cost growth has outpaced price increases by a record margin, reflecting that businesses are facing increasingly severe pressure on profit margins. Meanwhile, persistently high and sticky inflation has led markets to anticipate that the Reserve Bank of Australia (RBA) may need to raise the policy rate for the fourth time this year, potentially as early as its meeting this month.

Impact on stocks 1

Others▼ · 1 stocks
％Australia Government Bond 10Y
AU-10Y
▼ NegativeMonetaryrelevance

Survey signals economic slowdown and sticky inflation, leading markets to expect RBA rate hike, which would push yields up, but the bond price falls; however, the yield direction is ambiguous as rate hike expectations could raise yields, but economic slowdown could lower them. Given the article emphasizes rate hike expectations, yield likely rises, but the bond price falls, so direction for yield is pos? Actually, the instruction says for bond yield, state direction of yield: up = pos? No, it says 'state direction of the YIELD (up = yield rises = bond price falls)'. So if yield rises, direction is 'pos'? But the example says 'a rate cut / flight-to-safety → yield DOWN (negative)'. So yield up is positive? Actually, they say 'negative' for yield down, so yield up is positive. But here, rate hike expectations would push yields up, so direction is 'pos'? But the article also says economic slowdown, which could push yields down. The net effect is ambiguous. However, the article explicitly says markets anticipate RBA may raise rates, which would increase yields. So direction is 'pos' for yield. But the bond price falls, but we are judging yield. So I'll set direction 'pos' with aspect 'monetary'.

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