Manufacturing contracts to nine-month lows

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Performance of Manufacturing The Performance of Manufacturing index fell by 4.4 points in September to a nine-month low of 47.3.  Any reading below 50 means the manufacturing sector is contracting. Of more concern, the production sub-index fell to a nine-month low, employment is now at 11 month lows and new orders have slumped to 14

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RBA sets the scene for a rate hike

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RBA Board minutes; ABARE Australian Commodities; Airfares Minutes of the last Reserve Bank Board meeting echo’s the sentiments of the Governors speech yesterday and adds further weight to the likelihood of an interest rate hike. Board members remained quite comfortable with current interest rate settings, however “observed that previous investment booms and increases in the

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Petrol spikes as discounting cycle resumes

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Petrol price; RBA Governor speech Petrol prices have risen for the first time in five weeks. The Australian Institute of Petroleum reports that the average Australian petrol price rose by 3.6 cents a litre last week – the biggest weekly price gain in seven months. The national pump price stands at a 3-week high of

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Businesses hopeful; Farmers rejoice; Cash is still king

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NAB business survey; ABARE Crop Report; Consumer finances Business confidence is up; conditions are down. According to the NAB business survey, the business confidence index rose from +2.4 in July to +11.2 in August. The business conditions index fell from +5.3 in July to +4.5 in August – the fourth decline in five months. Retail

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Aussie tourism in trouble

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Regional economy Australia’s tourism sector was already in trouble, but it is now set to come under even more pressure from renewed strength of the Aussie dollar. The Australian dollar rose to near 21-year highs against the Euro this morning while also lifting above US93 cents. The tourism deficit (excess of departures over arrivals) is

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Chinese economy powers along

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Chinese economic data The Chinese economy strengthened in August. Production, retail trade, inflation and money supply all grew at a stronger annual rate in August suggesting that authorities will need to lift rates to slow the economy. Industrial production rose at a 13.9 per cent annual rate in August with retail spending up 18.4 per

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China engineers a soft landing

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Chinese economic data; Mobile phone sales Chinese trade surplus eases as imports surge. China recorded a trade surplus of US$20.03 billion in August – below forecasts centred on a result near US$26.9 billion. Exports were up 34.4 per cent on a year ago (consensus +35.0 per cent) and imports were up 35.2 per cent (consensus

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China’s workers agitate for their rights

In China recently, workers at a Honda Motor factory did something that is illegal in the communist country. They went on strike. More interestingly, they won. Honda management at the plant in southern Guangdong province agreed to pay higher wages to settle the June dispute. The strike was not a unique event in China. Every

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Currency jigsaw puzzle

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As authorities in Western economies grapple with slow economic growth and exhausted policy tools, an old policy favourite, ‘currency devaluation’, could become an appealing option. It may be challenging to devalue one’s currency when many other nations are in the same economic predicament, particularly when those nations are holding one’s debt. However, solving the currency

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