Week in review

• Australia August CPI inflation fell to 2.7% y/y
• RBA held official cash rate at 4.35%
• U.S. PCE inflation 2.2% y/y for August

Week ahead

• China manufacturing and services PMI
• Australia retail sales
• U.S. nonfarm payrolls and unemployment rate

Thought of the week

China announced a range of policy measures last week to support both the economy and market. The announcement was a surprise given both the range and magnitude policy changes. Support for the housing market came via cuts to key policy rates and a lowering of the minimum downpayments for homebuyers. The re-lending facility to support the purchase of housing stock was also extended. These policies are unlikely to be a game changer for the economy, or the housing market, given the still high levels of housing inventory and low household income expectations which may limit the take up of new mortgages, even at lower rates. The announcements are positive as they signal a coordinated policy response from Chinese officials and should limit further downside risk to the economy.

China still has an overhang of housing inventory to clear Number of months to clear current housing inventory across tier cities

Source: Citi Property Research, J.P. Morgan Asset Management. Data reflect most recently available as of 27/09/24.
All returns in local currency unless otherwise stated.
Equity price levels and returns: Levels are prices and returns represent total returns for stated period.
Bond yields and returns: Yields are yield to maturity for government bonds and yield to worst for corporate bonds. All returns represent total returns. AusBond Comp is the AusBond Composite 0+ Yr, AusBond IG is the AusBond Credit 0+ Yr both provided by Bloomberg.
Currencies: All cross rates are against the Australian dollar. An appreciation of the foreign currency against the Australian dollar would be positive and a depreciation of the foreign currency against the Australian dollar would be negative.

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