A lot of the economic data released last week pointed to a slowdown in momentum with consumer confidence down, ANZ Job Ads flat and most significantly, building approvals plunging a massive 9% in November. The news wasn’t all bad though, with another healthy trade surplus in November, job vacancies up and retail sales up a solid 0.4%.
The overriding influence on markets at the moment however is the optimism that the talks underway in Beijing will bear fruit in terms of progress toward a US/China trade deal. Many traders were back from holidays last week for the first full week of 2019 to digest all that has happened over the holiday period but generally came back on a positive note.
Financial markets currently remain convinced there is a strong possibility that the RBA will cut interest rates later this year. While the majority of economists are sticking to a view that the next move by the RBA is up, the opposite camp is gaining some credibility.
My view remains that rather than cutting interest rates, the RBA will just leave the cash rate unchanged for longer.