Aus macro/AIG

The AIG data for November are out. Grim, in a word.

Their words were “materially contractionary”, so, similar in vibe.

Most of the data subset were weak, but the new orders data are the one we tend to home in on. That was also quite soggy.

Diffusion indices, surveys, the various PMI’s across the globe, have all been weak for quite some time, with hard data (e.g. actual retail sales/capex/construction/production data) have all been a lot stronger.

So I am less sure than usual about how much faith to place in them. But not “no faith”. Somewhere between the two extremes.

Either way, our general narrative for Australia has been “we are not as strong on our economic underfootings as the US, and therefore cannot have high rates for long without causing a material downturn”, and that narrative remains.

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