Private sector capex

Whether the RBA is 50,50,50 or any other combination, a lot is forthcoming.

Credit growth is running hot, labour markets are on fire. Our view, the economy has tremendous fragility, notwithstanding these positive features, and the RBA is gonna get a lot of blame regardless…

It will be very interesting to see how the banks and the REITs trade over next week’s RBA move. The banks were crushed post last month’s decision, fearing a rising BDD cycle, despite the plausible story around NIM expansion.

Since then, perhaps some of the “sticker shock” about the pace of tightening has been digested, and perhaps the competitive response of the banks (e.g. CBA’s massive fixed rate hike, but variable cut) will provoke a different response. We shall see.

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