Glenn Stevens Speech

The RBA Governor Glenn Stevens spoke at the CEDA dinner last night in Melbourne. His speech didn’t directly comment on the outlook of monetary policy and was more focused on Australia’s longer-term economic outlook. He expects business development to rise significantly over the next few years and demand for our resources to remain strong from the likes of India and China. Stevens did mention that “we obviously have to be wary of overheating”, which may suggest further tightening if the economy continues to be heavily supported by the minerals boom.

Debt fears continue to linger in Europe despite Irelands $EU85b bailout package, as investors are focused of debt woes spreading to Italy, Portugal and Spain. This came on the back of an Italian Sovereign Bond auction that attracted lackluster demand fuelling fears about debt refinancing.

HIA Home sales rose 2.4% yesterday, which was the first time in 6 months, but business inventories fell 0.8 per cent in the September quarter despite economists expecting inventories to have risen by 0.4 per cent. Australian company profits also fell 1.5% in Q3. These figures are causing economists to lower their expectations for GDP to be released in Wednesday. Some are even talking now of a negative number.