The Australian came under pressure today after the release of second quarter capital expenditure, which fell short of expectations and ads to the case for the RBA to keep rates on hold for the foreseeable future.
The Capex figures released earlier today fell 2.5 percent in comparison with the previous quarter’s numbers, and were well short of analysts’ expectations for a rise 0.6 per cent.
This news has now seen financial markets pricing in a rate hike from the RBA at the end of 2019 and before the release, many were predicting a rate rise near the end of this year.
Other data today release from Australia fared even worse with the latest building permits figure coming in at -5.2 percent against expectations for a figure of -3.5 percent and sharply lower from last month’s figure of 6.4 percent.
The housing market in Australia is already facing tough times, this news is expected to cause further headaches in the market, and some believe that development companies may start to cancel building projects as the situation becomes worse.
This is just added evidence that the Reserve Bank of Australia needs to keep rates on hold or risk causing a complete collapse of the housing Market.
"With the Sydney and Melbourne housing markets swinging into price corrections and financing conditions tightening for both home buyers and developers, we may also start to see projects proceed more slowly or be shelved altogether," said Matthew Hassan, a senior economist at Westpac.