Some figures came out yesterday showing evidence of something that the RBA has been keeping a close eye on. The rate hike process began in the midst of a flurry of government stimulus packages. The worry was that the economy may not have the legs to continue it's path of strength once the full might of those packages was reduced. The economy has held up a little more strongly than I had expected and China is largely responsible for this. Some weakness is however begining to show.
Retail sales slid by 1.4% in February - the most in a year. Building Approvals also dropped in the month falling by 3.3% following a revised fall of 5.5% in Jan. Economists had expected a rise of 2.1%.
A slew of economists have now come out suggesting the RBA will pause. Personally I think the RBA are on a course to move the cash rate closer to normal and will continue their rate hikes in April.
International
As a reminder of how lucky we are unemployment figures for the Eurozone ticked up to double digits last month at 10% (Spain is around 19%) and inflation is up from 0.9 to 1.5% now. High unemployment and high inflation is not a good combination to have!
Also Greece had a reasonably unsuccessful bond issue and Moody's has downgraded a few of their banks.
