1 00:00:05,160 --> 00:00:07,680 Speaker 1: Welcome to Fear and Greed the week Ahead. I'm Sean Almer, 2 00:00:07,720 --> 00:00:10,280 Speaker 1: and as always I'm joined by economist Stephen Cooculis. You'll 3 00:00:10,280 --> 00:00:12,560 Speaker 1: find him at the Cook dot com, t h e 4 00:00:12,640 --> 00:00:15,160 Speaker 1: k o UK dot com and on excusing the handle 5 00:00:15,160 --> 00:00:17,480 Speaker 1: of the kirk. Stephen, Good morning, very good morning, Sean. 6 00:00:17,760 --> 00:00:21,000 Speaker 1: Big week last week monthly CPI. I like that one. 7 00:00:21,880 --> 00:00:24,920 Speaker 2: It was, and even though it was a tiny smidge 8 00:00:24,960 --> 00:00:27,160 Speaker 2: above what the markets were expecting, it was still a 9 00:00:27,160 --> 00:00:30,560 Speaker 2: pretty good result. The headline figure in annual terms two 10 00:00:30,560 --> 00:00:34,000 Speaker 2: point four percent. So let's call that the bullseye of 11 00:00:34,040 --> 00:00:37,400 Speaker 2: the midpoint of the RBA target range trimmed mean two 12 00:00:37,400 --> 00:00:39,559 Speaker 2: point eight went from two point seven, but the month 13 00:00:39,560 --> 00:00:41,680 Speaker 2: before that was two point eight. But you know, we 14 00:00:41,720 --> 00:00:43,720 Speaker 2: can sort of quibble with each of these little things 15 00:00:43,720 --> 00:00:46,919 Speaker 2: and not was tobacco prices that were stronger, or the 16 00:00:46,920 --> 00:00:48,960 Speaker 2: any of some of the electricity subsidies which are having 17 00:00:48,960 --> 00:00:52,960 Speaker 2: an impact on the very recent numbers. Suffice to say, 18 00:00:53,520 --> 00:00:56,800 Speaker 2: inflation is within the band on the trimm demean the 19 00:00:56,880 --> 00:01:01,040 Speaker 2: headline excluding volatile items. You cut and whichever way you want, 20 00:01:01,080 --> 00:01:04,240 Speaker 2: and you're getting two points something. So the Reserve Bank 21 00:01:04,680 --> 00:01:06,640 Speaker 2: would be very pleased to be saying. 22 00:01:06,400 --> 00:01:10,520 Speaker 1: That, okay, pleased enough to cut rates again at some point. 23 00:01:11,200 --> 00:01:14,600 Speaker 2: Look, I think so rate cuts a still priced into 24 00:01:14,600 --> 00:01:16,600 Speaker 2: our curve, and I think that's probably going to be 25 00:01:16,640 --> 00:01:18,960 Speaker 2: the case. The other thing which came out last week, 26 00:01:19,000 --> 00:01:21,959 Speaker 2: which was not a concern, but something that was just 27 00:01:22,000 --> 00:01:26,000 Speaker 2: a bit softer, the private sector capex numbers were down 28 00:01:26,040 --> 00:01:28,679 Speaker 2: a smidge in the March quarter. They're down zero point 29 00:01:28,720 --> 00:01:31,360 Speaker 2: five percent year on year. You know, we know that 30 00:01:31,400 --> 00:01:35,080 Speaker 2: we need this capex, private sector capex to be stronger 31 00:01:35,080 --> 00:01:37,960 Speaker 2: if we're to get this productivity improvement. So there was 32 00:01:38,000 --> 00:01:40,680 Speaker 2: a bit of an extra jump in spending in buildings 33 00:01:40,680 --> 00:01:43,800 Speaker 2: and structures, you know, warehouses and hotels and those sorts 34 00:01:43,840 --> 00:01:47,280 Speaker 2: of things. Machinery and equipment a bit soggy. So we've 35 00:01:47,280 --> 00:01:49,800 Speaker 2: got this sort of dilemma there that you know, the 36 00:01:49,840 --> 00:01:54,440 Speaker 2: private sector and business investment this sort of lagging any 37 00:01:54,480 --> 00:01:56,120 Speaker 2: sort of economic recovery. So that was a bit of 38 00:01:56,120 --> 00:01:59,000 Speaker 2: a damn. The extent that interest rates in influenced capex, 39 00:01:59,040 --> 00:02:02,640 Speaker 2: and they do a bit. It's just another little tick 40 00:02:02,720 --> 00:02:06,280 Speaker 2: in the ledger towards that rate cut happening again, whether 41 00:02:06,360 --> 00:02:09,040 Speaker 2: it's July or August. TBA. 42 00:02:09,200 --> 00:02:12,440 Speaker 1: So that tho's capex figure they will put down well, 43 00:02:12,560 --> 00:02:15,480 Speaker 1: not downward, but they'll keep a lid on economic growth 44 00:02:15,520 --> 00:02:17,720 Speaker 1: for the March quarter, and of course we get that 45 00:02:17,800 --> 00:02:18,760 Speaker 1: data out this week. 46 00:02:19,280 --> 00:02:22,320 Speaker 2: We do on Wednesday, we get the National Accounts which 47 00:02:22,320 --> 00:02:24,680 Speaker 2: has the GDP result, and there's a few bits and 48 00:02:24,720 --> 00:02:26,959 Speaker 2: bobs that are coming out today and tomorrow ahead of 49 00:02:27,000 --> 00:02:29,720 Speaker 2: Wednesday's release. We've got sort of some government spending numbers 50 00:02:29,760 --> 00:02:32,000 Speaker 2: and inventories and all that sort of stuff, which, as 51 00:02:32,040 --> 00:02:35,280 Speaker 2: we in economics say, they're building blocks to the GENDP numbers. 52 00:02:35,639 --> 00:02:37,000 Speaker 2: But it does look as if it's going to be 53 00:02:37,600 --> 00:02:40,800 Speaker 2: a pretty modest growth rate for the here and now, 54 00:02:40,880 --> 00:02:42,960 Speaker 2: and of course this number will change. We'll get these 55 00:02:43,000 --> 00:02:47,080 Speaker 2: partial indicators looks like about a point five point six 56 00:02:47,280 --> 00:02:50,720 Speaker 2: quarterly figure annual because of a very low figure drops 57 00:02:50,720 --> 00:02:52,240 Speaker 2: out of a year on year underrate. It does pick 58 00:02:52,320 --> 00:02:54,400 Speaker 2: up a little bit to about one point six or 59 00:02:54,440 --> 00:02:57,519 Speaker 2: one point seven percent. So if you're seeing a point 60 00:02:57,560 --> 00:03:01,040 Speaker 2: five quarterly figure an annual figure of one point six 61 00:03:01,160 --> 00:03:03,440 Speaker 2: or seven, it's still not that sort of growth that 62 00:03:03,480 --> 00:03:06,840 Speaker 2: we've loved and become accustomed to in Australia. We should 63 00:03:06,840 --> 00:03:09,840 Speaker 2: be seeing quarterly growth about point seven point eight quarter in, 64 00:03:09,919 --> 00:03:12,800 Speaker 2: quarter out annual figures sort of near that two and 65 00:03:12,800 --> 00:03:15,000 Speaker 2: a half before we can be confident that we've got 66 00:03:15,040 --> 00:03:16,600 Speaker 2: a decently growing economy. 67 00:03:16,880 --> 00:03:18,840 Speaker 1: What was interesting a couple of weeks ago in the Reserve, 68 00:03:18,919 --> 00:03:22,160 Speaker 1: Vank did cut interest rates. Michelle Bullock talked more about 69 00:03:22,160 --> 00:03:25,840 Speaker 1: economic growth than I remember her for quite a few meetings, 70 00:03:25,919 --> 00:03:28,440 Speaker 1: and she talked about inflation, but it just they're just 71 00:03:28,480 --> 00:03:32,360 Speaker 1: not the emphasis on inflation as these are the economic 72 00:03:32,400 --> 00:03:33,679 Speaker 1: growth that last time. 73 00:03:34,120 --> 00:03:36,040 Speaker 2: Yeah, look, I think that's a good pickup, and I 74 00:03:36,040 --> 00:03:39,680 Speaker 2: think the RBA's analysis and emphasis, if you like, not 75 00:03:39,800 --> 00:03:42,120 Speaker 2: that they've ever take that ife inflation. They never will, 76 00:03:42,480 --> 00:03:44,480 Speaker 2: even when it's two point five. They'll still sort of 77 00:03:44,480 --> 00:03:46,520 Speaker 2: be worried it'll go too high, too low, or something 78 00:03:46,600 --> 00:03:49,520 Speaker 2: like that. But now that they've got inflation down from 79 00:03:49,840 --> 00:03:52,160 Speaker 2: almost eight percent, goodn't to me? It wasn't that bad 80 00:03:52,400 --> 00:03:54,640 Speaker 2: two and a half years ago now to be this 81 00:03:54,760 --> 00:03:56,960 Speaker 2: two and a half plus or minus a few ticks. 82 00:03:57,720 --> 00:04:00,800 Speaker 2: The focus now is on growth and the labor You're 83 00:04:00,840 --> 00:04:03,240 Speaker 2: quite right, But when she was talking about growth and 84 00:04:03,520 --> 00:04:07,720 Speaker 2: the disappointing expansion in household spending that they're provides down 85 00:04:07,760 --> 00:04:11,920 Speaker 2: their outlook for consumer spending and that's sort of possibly 86 00:04:11,960 --> 00:04:14,160 Speaker 2: going to have a lagged impact on the labor market, 87 00:04:14,200 --> 00:04:16,240 Speaker 2: which of course is another part of their mandate. So 88 00:04:16,839 --> 00:04:19,520 Speaker 2: that not to say that inflations sort of we can 89 00:04:19,600 --> 00:04:22,080 Speaker 2: do the cartwells down the street. The inflation has been beaten, 90 00:04:22,080 --> 00:04:24,320 Speaker 2: but we've got it back on target. The focus of 91 00:04:24,360 --> 00:04:27,360 Speaker 2: the RBA now, I think is growth and jobs. 92 00:04:27,960 --> 00:04:31,440 Speaker 1: Okay, Stephen one other, well, there's more day rout this week. 93 00:04:31,480 --> 00:04:35,320 Speaker 1: But house prices, that's always one. We're interested in house prices. Yes, 94 00:04:35,600 --> 00:04:38,880 Speaker 1: the Cautality formerly core Logic is Tim Lawless likes to 95 00:04:38,880 --> 00:04:43,559 Speaker 1: remind me he's the head of Cotality research over there. 96 00:04:43,839 --> 00:04:46,320 Speaker 1: Probably a little bit of an acceleration in house price 97 00:04:47,080 --> 00:04:50,719 Speaker 1: gains about a point five month on month. And what's 98 00:04:50,800 --> 00:04:52,880 Speaker 1: happening and what has happened the last few months and 99 00:04:52,960 --> 00:04:55,680 Speaker 1: probably going to be happening again when we get these 100 00:04:55,680 --> 00:04:58,960 Speaker 1: figures from May, is that Melbourne's recovered. Melbourne had been 101 00:04:59,040 --> 00:05:01,159 Speaker 1: very weak for period of time. Mom looks as if 102 00:05:01,200 --> 00:05:03,799 Speaker 1: it's picking up a bit. Sydney, which had that pause 103 00:05:03,839 --> 00:05:05,920 Speaker 1: in house price growth at the end of last year 104 00:05:05,920 --> 00:05:08,200 Speaker 1: earlier this year, looks as if it's picking up and 105 00:05:08,279 --> 00:05:12,960 Speaker 1: the boom cities the Perth, Adelaide and Brisbane are still 106 00:05:13,000 --> 00:05:14,880 Speaker 1: cooling off. So we've sort of got a convergence in 107 00:05:14,920 --> 00:05:17,720 Speaker 1: the price trends, but house prices just edging up. The 108 00:05:18,200 --> 00:05:20,560 Speaker 1: shortage of property is still there, a couple of rake 109 00:05:20,640 --> 00:05:23,200 Speaker 1: cuts starting to sort of impact on people's sentiment and 110 00:05:23,320 --> 00:05:27,840 Speaker 1: spending patterns. So yeah, housing probably just a little bit stronger. Stephen, 111 00:05:27,960 --> 00:05:28,520 Speaker 1: enjoy your week. 112 00:05:28,880 --> 00:05:29,400 Speaker 2: Thank you, Sean. 113 00:05:29,760 --> 00:05:31,920 Speaker 1: As economist Stephen Cook curl it's better Nan as the Kok. 114 00:05:32,000 --> 00:05:33,479 Speaker 1: You can find him at the cook dot com and 115 00:05:33,560 --> 00:05:35,880 Speaker 1: follow him on exit using the handle of the Kirk. 116 00:05:36,160 --> 00:05:38,359 Speaker 1: I'm Sean Aelmer and this is fear and Greed. The 117 00:05:38,360 --> 00:05:39,760 Speaker 1: week Ahead.