RBA Minutes Maintain Hawkish Tone as Housing Softens

• Today’s RBA Minutes, combined with commentary through the week, paint a picture of a Board that is not yet comfortable with where inflation could be heading domestically.
• The tone of the Minutes was consistent with the hawkish hold delivered at June’s meeting, with members going a step further than the post-meeting statement in concluding that financial conditions have likely moved into restrictive territory.
• Cotality’s Home Value Index fell 0.4% month-on-month in June, the sharpest monthly drop in three and a half years, with Sydney and Melbourne leading the decline at -1.2% and -1.0% respectively.
• US labour demand showed continued resilience in May, with JOLTS job openings nudging up 9,000 to 7.59 million – the highest reading in two years.
• Consumer confidence was a touch softer than expected, with the Conference Board index lifting 0.6 points to 91.2 in June, falling short of the 94.4 consensus. The modest gain was driven by an improved outlook rather than any strengthening in current conditions.