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.