September Observations

Interest Rate Outlook

The RBA again kept rates on hold at 4.10% at their September meeting. Another lower monthly & quarterly inflation read and further weakness in discretionary spend saw the bank again keep rates steady. The outlook looking more and more likely that the tightening phase may be over. The risk to this being service based increases in prices.

September marked a change in guard at the reserve bank, with Philip Lowe making way for Michele Bullock.


Inflation Outlook

The monthly CPI indicator annual movement dropped to 4.9% in June, down from 5.4%. Again this drop was more than predicted lending weight to the theory this tightening cycle is over. The RBA’s target rate of 2-3% may still be some time off though. Whilst increased rates have helped, certain pockets of the economy are starting to show signs of strain.


Other notable items

  • The China shadow debt and property bubble are seen as key risks to the global and specifically Australia being a key trading partner
    • Two of the counties biggest developers have recently had issues with repaying coupons on debt instruments they hold


Upcoming Lodgement Dates for August:

  • 21 September – Lodge and pay monthly business activity statement