Central Banks Forex Market Intelligence News

Australian services and composite PMIs for October drop into contraction

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S&P Global / Markit PMIs from Australia for October.

Services 49.3 vs. September 50.6
Composite 49.8 vs. September 50.9

The preliminary results out back on the 23rd were in contractions (49.0 and 49.6 respectively

Commentary from the report:

  • The latest RBA interest rate decision and ongoing global inflationary pressures appeared to have weighed on economic conditions and affected the Australian private sector economy’s performance according to the latest PMI data. Demand declined at the fastest rate since September 2021, which led to weaker overall business activity.
  • Meanwhile price pressures intensified once again in the service sector despite the easing of demand, thus outlining the constraints that private sector firms continue to face at the start of the fourth quarter.
  • While the worsening of price pressures backs the further tightening of monetary policy, this will be set against a backdrop of contracting business activity which renders greater caution from the central bank.

Demand dropping very rapidly, inflation pressures “intensified yet again”. The employment market has been holding up but jobs are a lagging indicator. Ugly times still to come.

AUD/USD barely moving after the release, the gyrations overnight were on the Federal Open Market Committee (FOMC):