Over the weekend, The FT released a report that warned of the potential impact the Chinese economic recovery could have on the commodity currencies in general and the Aussie in particular. The RBA warned last week that at least another rate hike would be likely. Last week iron ore fell around 10%, continuing a downwards trend that has been going on for over a year.
NAB Business confidence has split the difference between the expectations and the previous. It was flat at a level above -1 from last month but below +1 expected. The indicator shows that Australian businesses are waiting to see how the economy develops. The consumer is expected to be pessimistic. Westpac consumer confidence is expected to drop by -4.3% Prior to that, 9.4%.
What the report says
The Financial Times over the weekend compiled a series of comments from high-profile western companies that were warning earnings could be hit from China’s slow recovery. The conclusion from many was that many people had overestimated China’s post-covid recovery, and that the growth prospects were overly optimistic.
Many of these companies were centered around the consumer goods sector, such as Estee Lauder, Starbucks and Hilton, saying their growth hadn’t…