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RBA’s deputy Governor, Debelle, is crossing the wires with a Keynote Address At the 14th Annual Risk Australia Conference.

Key comments:

  • Evidence that fall in house prices has reached its end, may start supporting consumption.
  • Assumes households will spend around half of tax refunds.
  • Do not expect much of an increase in wages growth, employment seen “reasonable”.
  • Primary risk to domestic economy is outlook for consumption.
  • Trade is increasingly being used as a bargaining tool of choice.
  • China stimulus has, so far, offset impact of trade dispute on Australia.
  • Firms might have to chose between east and west rather than selling into global market.
  • Sino-US. trade dispute causing significant uncertainty for business.
  • Plausible that effects of technology dispute will be larger than that of tariffs.
  • Businesses waiting to see how uncertainty resolves rather than invest.
  • Says reluctance to invest runs the risk of a self-fulfilling downturn.

FX implications:  

There was a brief pop to the downside but the markets are dead, awaiting the Australian  Unemployment data as the main driver for the day ahead.