NAB Raises Cash Target From 2% to 2.5%

I always thought 2% was a little extreme and with a few green shoots coming through and a positive monthly business activity survey coming out yesterday it looks like NAB are thinking that way now too. Here are a few lines from their summary:

** Business confidence stabilises at higher levels “relative” to very depressed levels earlier this year.

** Business conditions improve significantly - driven by retail and transport as Government cash initiatives improve retail and associated activities. Finance also edges higher.

** Forward orders also improve as does capacity utilisation and employment.

** All of these measures, however, remain at low levels - with future expectations at record lows. Overall, Survey consistent with (possibly temporary) moderate growth in demand in early Q2 2009.