AUSTRALIA DATA: Household Spending Close To Forecast - Steady Trend Near 3%y/y
Australian Feb household spending data was close to market expectations. The m/m outcome was 0.2% (versus 0.3% forecast and a revised 0.5% gain in Jan). In y/y terms we rose 3.3%, against a 3.2% forecast and prior 3.2% outcome (originally reported as a 2.9% gain). Note this release will replace the retail sales release from June this year.
- The ABS noted: "In seasonally adjusted, current price terms, household spending increased for five of the nine spending categories. The largest increases were in: recreation and culture (+0.9%), food (+0.6%), hotels, cafes and restaurants (+0.5%)."
- It added: "In seasonally adjusted, current price terms, discretionary spending rose 0.3% month-on-month, driven by increased spending on purchase of vehicles, recreational and cultural services, and personal effects." Non-discretionary spending was down modestly.
- The chart below plots the y/y trend in household spending, which is largely sideways since early 2024, with a slightly uptick in early Q4 last year, aided by government support. This suggests a modestly positive spending backdrop. Today's data is unlikely to shift RBA thinking.
Fig 1: Australian Household Spending - Y/Y, Largely Sideways Trend
Source: MNI - Market News/Bloomberg
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JGBS: Futures Are Weaker, BoJ Speaks At IMF Event
In Tokyo morning trade, JGB futures are weaker, -14 compared to settlement levels.
- BoJ Governor Ueda warned that rising geopolitical tensions will test the resilience of Asian emerging markets. He noted that global economic fragmentation could further widen monetary policy divergences and that escalating tensions may lead to sudden reversals in cross-border capital flows.
- S&P Global PMIs for February have printed: Composite Index rose to 52 from 51.1 in January, and Services Index rose to 53.7 from 53 in January.
- Today, the local calendar will also see BoJ Rinban Operations covering 1-5-year and 10-25-year JGBs. BoJ Deputy Governor Uchida will also give a speech in Shizuoka.
- Cash US tsys are 1-2bps richer in today’s Asia-Pac session after yesterday’s heavy session.
- Cash JGBs are flat to 2bps cheaper across benchmarks, with a steepening bias. The benchmark 10-year yield is 1.6bps higher at 1.441% versus the cycle high of 1.466%.
- Swap rates are 1-3bps higher. Swap spreads are wider.
AUSTRALIA DATA: Broad Based Pick Up In Growth
Q4 GDP printed exactly in line with consensus at +0.6% q/q & 1.3% y/y up from 0.3% & 0.8% in Q3. Public, private and overseas demand contributed to growth. See ABS press release here. More details to follow.
MNI: AUSTRALIA Q4 GDP +0.6% Q/Q
- MNI: AUSTRALIA Q4 GDP +0.6% Q/Q
- MNI: AUSTRALIA Q4 GDP +1.3% Y/Y
