Daily Commentary BY THE CURVE TEAM –

FOMC Drop the Word Accommodative

18th October 2018

The RBA’s Deputy Governor, Guy Debelle’s speech yesterday is an excellent read on “The State of the Labour Market”.

The FOMC Minutes maintained a hawkish tone, irrespective of President Trump’s vocal opposition to the current rapid speed of interest rate hikes. They dropped “accommodative” to describe current monetary policy settings and still seem to be on track to take the cash rate higher to 2.25% – 2.50% in December.

Australia’s employment statistics are due out at 11.30am.  Consensus employment growth is 15k jobs; however, there are high end forecasts of 30K by NAB. If this larger than expected number occurs the unemployment rate is expected to tick down to 5.2% from 5.3%.

The NAB Quarterly Business Survey for Q3 is also being released. Quarterly surveys provide richer context than the monthly releases. It will provide greater insights on employment and capex intentions for the year ahead and additional details on wage trends.

The Australian Prudential Regulation Authority (APRA) has published an information paper to assist ADIs in meeting their obligations under the Banking Executive Accountability Regime, which APRA oversees.

Peter Sheahan

Director - Institutional Markets