It’s a big week for markets in Australia with a speech by RBA Governor Glenn Stevens tomorrow night and the all important capital expenditure data out later this week.
Both events will give markets, and traders, a good feel for how Australia’s economic transition is progressing.
In a sign that the business economy, at the very least, continues to improve the Commonwealth Bank’s latest Business Sales Indicator (BSI) showed that “economy-wide spending grew in October by 0.6% in trend terms, the same figure as the preceding three months.”
The seasonally adjusted number, which is more volatile, the bank says, rose 0.5%, down sharply on last month’s 3.3% rise. That means that seasonally adjusted growth in year-on-year terms is down but still very strong at 7.4%.
Interestingly the annual numbers show that two states, Northern Territory (-6.9%) and New South Wales (-1.2%) have sales running below last year. The other states are all running at a 6% or faster pace the other growth engine of the Australian economy, Victoria, only saw annual sales growth of 0.5%. That’s something to watch.
Craig James, Commsec chief economist noted that this means, “Annual growth figures still show that economy-wide spending remains above the decade average, and this continues a long stretch of positive annual growth dating back to early 2012.”
And the really good news?
“Australian businesses have reasons for optimism ahead of Christmas given a lower Aussie dollar, declining unemployment, positive consumer sentiment and interest rates near generational lows,” James said.
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