Daily Flows & Insights – Sharp Jump in Labour Costs For Businesses
Nab Monthly Business Survey – July 2023

Daily Flows

  • A BBB rated ADI had their last day of discretionary pricing yesterday.
  • This saw market participants take advantage of the fleeting opportunity and lock in 2-5 year TDs upwards of 5.25%.
  • Multiple domestics are at +50 for 3 months and Foreign branch banks at +55.

NAB Business Survey & Westpac Consumer Confidence

  • This NAB Business Survey marked the first data point that would reflect the increases from federal government in award wages, reflected in labour costs growing to 3.7% from 2.3% in June QoQ.
  • Rises in final prices and retail prices suggest that these labour costs may have been passed on immediately to firms prices.
  • The RBA are forecasting these labour pressures to ease throughout the back half of the year, with the employment rate forecasted to drop to 4.5%.
  • Even with the extended pause from the RBA, consumer sentiment has remained deeply pessimistic.
  • Consumers are not convinced rates will stay on hold, with over 2/3 of consumers expecting further rises in interest rates.
  • This sentiment is good news for the RBA, as consumers mindset is beginning to factor in tougher economic conditions and will have to readjust discretionary spending accordingly.
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Curve Team
Jack Pedersen