Good morning and welcome to our business live blog. It looks set to be a busy day in economics and finance in Australia and around the world, beginning with another slew of data on the Australian economy at 11.30 this morning followed by the Reserve Bank’s latest monthly verdict on the cash rate at 2.30 this afternoon.
- The key background in Australia is that there is increasing pessimism around tomorrow’s GDP number. A lot of recent data ghas pointed to a very low print tomorrow with the latest coming yesterday. In case you missed it, a mixed business indicator survey showed profits and wages were solid, up 4% on the back of strong earings in the mining sector in the June quarter, but inventories were down a surprising 0.9%.
- Economists at JP Morgan and UBS see the GDP quarterly number coming in 0.4% tomorrow but some have begun to revise that downwards. One analyst at Credit Suisse reckons the inventories were so bad yesterday that the GDP figure will be -0.6%.
- On interest rates nearly everyone expects the RBA to hold rates at 1% today – but the expectation is already there for cuts in October and maybe February next year. We might learn more from the wording of governor Philip Lowe’s statement later on.
- On the market, the ASX200 is expected to open down about 15 points or 0.23% this morning when trading gets under way in about 30 minutes. The US market was closed yesterday for Labor day but the FTSE100 was up 1% helped by the weak pound.
- The Aussie dollar is close to a 10-year low at $67.18c.
- On the politics side, the Coalition will be hoping that the GDP number is not too ugly or they are in for a tough few weeks explaining what happened to the economy under their watch. Scott Morrison has said he expects tomorrow’s number to be “soft”. They might blame uncertainty around the elction though and talk up a recovery in the third quarter.
- Labor leader Anthony Albanese has already been out there, telling a doorstop in Sydney that the government only has a political strategy and doesn’t have a plan to fix the economy.
Anyway, on with the program .