Australian February business confidence to -1 (prior +5)

The latest monthly National Australia Bank survey showed that Australian business confidence dropped back into negative territory in February, despite a recent rate cut by the Reserve Bank of Australia (RBA), signaling ongoing caution among businesses, according to National Australia Bank’s (NAB) latest survey.

• The business confidence index fell sharply to -1, down from +5 in January, erasing last month’s gains and remaining well below historical averages.
• Meanwhile, business conditions edged slightly higher, rising one point to +4, reflecting modest improvements in sales and profitability.

However, cost pressures persist, with purchase costs accelerating and profitability conditions remaining weak. NAB’s Chief Economist Alan Oster noted that businesses appear wary about the outlook, despite positive Q4 GDP data and the RBA’s first rate cut in over a year. Market pricing suggests another rate cut could come as early as May, but policymakers have warned that further easing is not guaranteed.

This article was written by Eamonn Sheridan at www.forexlive.com.