Daily Flows
- A barbell approach remains popular among market investors, with longer-term rates above 4.90% being locked in where cash flow permits.
- The Australian 10-year bond, a key indicator of long-term interest rates, has jumped 17 basis points over the past three days.
- Oil prices continue to hover around six-month lows, signalling weaker demand, which is positive for disinflation progress.
Per Capita GDP Records a Positive Result
- The ABS released Q4 GDP data yesterday, showing growth of 0.6% QoQ and 1.3% YoY, reflecting gradual economic expansion.
- As is typical for this quarter, household spending rose by 0.4% QoQ, driven by retail sales events and holiday-related consumption.
- Government spending eased to 0.7% QoQ, while public investment increased by 1.8% QoQ, supporting broader economic activity.
- The standout figure was GDP per capita, which rose by 0.1% QoQ after seven consecutive quarters of declines, supported by population growth peaking and gradual spending increases.
- Looking ahead, the economy appears to be tracking towards a more balanced position, with stronger GDP growth expected without a significant inflation pickup.
- The RBA will closely monitor the sustainability of supply and demand recalibration and adjust monetary policy accordingly.
