Line in the sand
Moving swiftly on from the rugby - well played South Africa - there's quite a bit going on this week, including retail and international trade figures, and the monthly inflation gauge, while markets expect the Reserve Bank to hold interest rates on Melbourne Cup day.
An interesting article in the AFR today noted that markets have found comfort in stronger economic data.
These variously included a drop in the jobless rate, as expected inflation data, and 'strong building approvals'.
Note that the trend result for building approvals was some 21 per cent lower year-on-year, and 32 per cent lower for attached dwellings.
The jobless rate remained miles away from full employment, being still at 5.2 per cent, though at least employment growth remained solid.
The thing that intrigues me most is the inflation target, an issue which presumably might be resolved one way or another at some point in the near future.
Inflation miss
For the third quarter of 2019 the core inflation figures were again very soft.
And the aforementioned piece in the AFR contained a remarkable quote from Michael Blythe of CBA:
'The RBA has given up on its inflation target as policymakers want to push it the other way.'.
This is interesting because the Board Minutes and the Governor's speech last week stated that the RBA remains committed to achieving the target 'over time'.
The problem may be that after years of missing the target some economists begin to believe that credibility has been lost; and it's not only economists, it's everyday punters that are firing up too:
Resolution time?
It will be interesting to see what we learn this week, with a Board Meeting and then the SOMP on Friday.
As Michael Pascoe pointed out at the New Daily, it'll soon be six months since the election, but no new agreement between the RBA and Treasurer has yet appeared.
Whatever plays out in this regard might be worth watching.
Elsewhere the commodities index in SDR terms was down by -2.4 per cent in October (preliminary), following a revised fall of -2.9pc for September.
