Macro (Re)view (31/1) | Navigating turbulence

Cross-asset volatility picked up as markets were dealt range of crosscurrents this week; elevated US tech valuations were called into question; President Trump vowed to impose tariffs on China, Canada and Mexico from February 1; while central bank policy divergence continued - the Fed hitting the pause button, but the BoC, Riksbank and ECB (discussed later) all cut by 25bps. Meanwhile, in Australia, an encouraging Q4 inflation report should allow the RBA to cut in February.    

A well-telegraphed pause in the Fed's cutting cycle saw rates left in the 4.25-4.5% range. With minimal changes in the decision statement and in the messaging from Chair Powell at the post-meeting press conference, pricing for around 50bps of further easing was maintained. The broad assessment of the Fed is that with 100bps of easing delivered since last September, rates are now well calibrated given the prevailing conditions and the policy uncertainty around the Trump administration. 

Although GDP figures for Q4 surprised to the downside of estimates at 0.6% quarter-on-quarter (2.5%Y/Y), US growth remains 'solid' in the view of the Fed while the unemployment rate has 'stabilised at a low level'. Inflation was characterised as still 'somewhat elevated' - its preferred core PCE deflator gauge came in at an unchanged 2.8%Y/Y pace in December - though the Fed remains confident that a return to the 2% target is on the horizon. A less dovish Fed through 2025 has kept US rates elevated and the dollar supported following their moves higher coming out of President Trump's election victory. 

The ECB continues to cut interest rates, announcing a further 25bps reduction across its policy structure. This lowered the key depo rate to 2.75%, falling since the middle of last year from cycle tights of 4%. Key assessments from the Governing Council at the previous meeting remained unchanged this week: disinflation is 'well on track' and risks to growth 'tilted to the downside' - not least due to impending tariffs that President Trump has said will be forthcoming.  

These dynamics are set to keep the ECB in easing mode through 2025. Markets are priced for rates to fall to 2% by year-end, implying an additional 75bps of cuts. That is one of the factors that has weakened the EUR to late 2022 lows just above parity to the USD. Should the downside risks to growth in the euro area materialise, the ECB may well cut beyond a neutral setting for rates into more expansionary levels. At the post-meeting press conference, ECB President Lagarde repeated familiar lines of data dependency and policy not being on a pre-set course. But some nuance was introduced with Lagarde telling markets that the ECB would next week publish new estimates of neutral policy settings.   

Continued disinflationary progress reported in Australia's pivotal Q4 CPI release has an RBA rate cut in February priced as a done deal, with a total of around 100bps of cuts now priced into the curve. Key outturns for headline CPI at 0.2%q/q and 2.4%Y/Y (from 2.8%) and core or trimmed mean CPI at 0.5%q/q - slowest clip in 2½ years - and 3.2%Y/Y (from 3.5%) all surprised to the downside of market expectations, and, more importantly, printed below the RBA's forecasts (2.6%Y/Y headline and 3.4%Y/Y core). My detailed report covers the release in full here, but the main takeaway is that the disinflationary process is showing signs of broadening out beyond the effects of cost-of-living subsidies. The dual mandate of the RBA has made preserving the strong labour market a priority for the Board. With inflation now in around the 2-3% target band, a February cut looks straightforward. 

Australian Q4 CPI 0.2%, 2.4%Y/Y

A cooler-than-expected Australian CPI report for Q4 has firmed pricing for an RBA rate cut in February to a greater than 90% probability, with almost 100bps of easing being discounted through the cycle. After essentially stalling over the first half of 2024, the disinflationary process in Australia was revived by government rebates in Q3. That momentum has subsequently continued into year-end, if anything broadening to other areas of the CPI basket - including services. Annual inflation is now at 3-year lows at 2.4% headline and 3.2% on trimmed mean (or core) terms and is below the RBA's most recent set of forecasts (2.6% headline and 3.4% core).

Headline inflation in the December quarter came in at 0.2%, below expectations for a 0.3% outcome but in line with its pace from Q3. Annual inflation slowed from 2.8% to 2.4% (vs 2.5% expected), a low since Q1 2021. Core or trimmed mean inflation printed its softest quarter-on-quarter rise in 2½ years at 0.5%, surprising to the downside of the 0.6% expected figure. This eased the year-on-year pace to its slowest since Q4 2021 at 3.2% (vs 3.3%), down from 3.5%. 

The situation should not be overcomplicated. The RBA raised the cash rate to 4.35% in response to inflation which peaked around 7-8% - that level of restriction is no longer required when inflation is now in and around the 2-3% target band. This is further highlighted with the 6-month annualised run rates slowing to 0.9% on headline CPI and 2.7% trimmed mean. Although the labour market remains strong, continuing to leave rates at their current level would put full employment - the other side of the RBA's mandate - at an increasing risk. The RBA must set monetary policy to balance the risks to both objectives.     

A slowing in non-tradables or domestically-driven inflation from 4.1% to 3.1%Y/Y - its softest pace back to Q4 2021 - as well an easing in price pressures in the key services basket from 4.6% to 4.3%Y/Y should give the RBA enough comfort to start easing on signs of a broadening in the disinflationary process beyond government subsidies. Goods inflation, meanwhile, declined to 0.8%Y/Y - now significantly more aligned with global trends - to its weakest in more than 8 years.      

The effects of government subsidies continued to push down on inflation strongly in Q4. That said, temporary effects - including the annual increase in tobacco excise and holiday travel in the peak summer period - added nearly 0.5ppt to quarterly inflation.   

Electricity prices nationally were down 9.9% on the quarter (following a 17.9% fall in Q3), with households benefitting from the second $75 installment from the Commonwealth government's rebate (households in some states received two installments in Q4). Commonwealth and state government electricity rebates directly cut more than 0.8ppt from headline inflation over the back half of 2024. Rent inflation moderated to a 0.6% increase in Q4 - its slowest clip since Q1 2022 - reflecting increases to the Commonwealth Rental Assistance scheme. Meanwhile, public transport fares fell a further 3.2% across the quarter (-2.1% in Q3) on subsidies in several capital cities.    

Away from the effects of subsidies, fuel prices continued to pull down on inflation with prices at the pump down 2% in Q4 after a 6.7% decline in Q3. Over the period, lower fuel prices have reduced headline inflation by more than 0.4ppt.  

Another key area that pushed down on inflation in Q4 was a 0.2% decline in new dwellings (or home building costs). This was the first decline in that series since the first half of 2021, with the ABS attributing this to home builders increasing incentives and other promotions to drive activity that has been subdued by higher interest rates.  

Preview: Australian Q4 CPI

Australia's Q4 CPI inflation report (due 11:30 AEDT) is finally upon us. The countdown to today's report has been on ever since the RBA abandoned its hawkish bias at its meeting on December 10, opening the door to easing monetary policy. Market conviction is high on a February rate cut, but good inflation outcomes are needed today as the labour market continues to remain very strong. Government subsidies to assist with the cost of living brought headline inflation back inside the RBA's 2-3% target band in Q3 for the first time since 2020, measures that underpin expectations for a further slowing from 2.8% to 2.6% year-on-year in Q4. The sticking point could be if core inflation, expected to print at 3.3%Y/Y, and prices in the services basket (4.6%Y/Y) fail to provide the RBA with sufficient signs of progress.      

December quarter preview: Government subsidies to hold CPI down further

The effects of cost-of-living measures subsidising electricity bills, rents and public transport fares are set to weigh further on inflation in the December quarter. Markets look for headline CPI to print at 0.4% quarter-on-quarter (range: 0-0.6%) and 2.6% year-on-year, down from 2.8% currently. Meanwhile, on a trimmed mean or core basis a 0.6%q/q outcome is expected (range: 0.4-0.8%), which (without revisions to prior quarters) would lower the annual pace from 3.5% to 3.3%. As it stands currently, the RBA's forecasts are for 2.6%Y/Y headline CPI and 3.4%Y/Y on the trimmed mean. 

As was the case in Q3, the key price movement will again be in electricity prices. Last quarter, federal and state government rebates saw electricity prices fall by 17.6%. These schemes should drive a further decline in Q4 - albeit with significant uncertainty around the magnitude. In the monthly CPI series, electricity prices fell by 12.3% in October; however, differences in the timing of when the various rebates have been applied led to a 22.4% rise in the ABS's calculation of prices in November. Households in Western Australia in December received rebates from both the federal and state government schemes, and this is expected to drive an overall decline in prices nationally in the final month of 2024.

The monthly CPI series indicated that government subsidies continued to lower rents and public transport fares in Q4. An increase to the Commonwealth Rent Assistance (CRA) scheme drove a 0.3% fall in rents in October before lifting by 0.6% in November. Although (as with electricity prices) there is uncertainty around the overall effect of the subsidy on rents (and therefore CPI) across the quarter, expect a further slowing following the moderation seen in Q3 to 1.6%q/q. Meanwhile, the public transport subsidies in Brisbane, Hobart and Darwin that drove a 2.1% fall in fares in Q3 still looking to be working their way through - the monthly CPI reported price declines of 0.2% in October and 0.1% in November. 

Aside from these areas in which subsidies have been in effect, new dwelling costs will be key. Inflation in new home building costs was strong through the first 3 quarters of 2024 at a run rate of 1-1.1%, but the monthly data showed a fall of 0.6% in November that the ABS noted was due to builders offering discounts and other incentives. If that continues into December, quarterly inflation for new dwellings could slow notably, which would weigh on both headline and core CPI. 

A recap: Inflation slows in Q3 on electricity rebates and lower fuel prices

Headline CPI returned inside the RBA's target band for the first time since the outset of the pandemic in the September quarter, but underlying inflation remained elevated to the target. Electricity rebates and declines in petrol prices saw headline CPI drop from 1.0% in Q2 to 0.2% in Q3 - its slowest quarterly rise since Q2 2020 - driving the annual rate down from 3.8% to 2.8%, a low since Q1 2021 and substantially below its peak of 7.8% in late 2022.

Much like overseas, the disinflationary impulse in Australia has been driven by the fading of earlier price spikes in energy, food and other goods. After largely stalling over the first half of 2024, disinflationary progress was revived in Q3 as federal and state government rebate schemes saw household electricity prices plunge (-17.3%q/q), and weaker global oil prices flowed through to the petrol pump in Australia (-6.7%q/q). On the back of this, goods inflation fell 0.6% in the quarter, slowing from 3.2% to 1.4% in annual terms. 

Removing the effects of volatile price movements, trimmed mean CPI was 0.8% in Q3 - a run rate inconsistent with 2-3% inflation over the near term; however, the annual pace still fell from 4.0% to 3.5% (slowest since Q4 2021) on base effects. The more elevated pace of core inflation highlights that price pressures remained in key areas of the basket.   

In contrast to goods inflation, services inflation firmed slightly in Q3 to a 1.1%q/q and 4.6%Y/Y pace, underpinned by household services, rents and insurance. The pass-through of higher input costs faced by firms to consumers as well as upward pressure on wages in a strong labour market have driven inflation in household services. Very low vacancy rates in the capital cities were placing upward pressure on rents, though (as outlined above) the CRA scheme led to lower rent inflation in Q3 (1.6%q/q).  

Macro (Re)view (24/1) | Tariffs bypassed... for now

Sentiment remained upbeat across markets this week as President Trump's inauguration went by without the immediate implementation of trade tariffs, while comments that he would prefer not to impose tariffs on China surprised. That set the tone for higher equities and a weaker US dollar. A hawkish 25bps hike from the Bank of Japan on the back of upward revisions to the inflation outlook supported the JPY. A lull of other event risks ahead of next week's Fed and ECB meetings saw headlines from the Davos forum gain more focus than might otherwise have been the case - notably around President Trump's call for lower oil prices and interest rates.      

The set up into next week's Fed meeting looks straightforward with markets priced for the FOMC to press pause on its easing cycle. Caution is expected to prevail amid uncertainty over the timing and design of policies under the Trump administration, while the 256k outcome on December payrolls that drove the unemployment rate to fall to 4.1% confirmed ongoing strength in the labour market. However, markets drew confidence from last week's CPI and PPI reports that the disinflationary process has not been derailed, pricing in further Fed easing in 2025 - albeit at a more gradual pace. 

Turning to the ECB, the Governing Council is expected to continue its easing cycle with a 25bps cut next week. Comments at Davos from ECB President Lagarde highlighting increased confidence in the trajectory of inflation back to target broadly aligns with market expectations for the key policy rate to be cut towards 2% over the course of the year from its current level of 3%. Restrictive monetary policy has weighed materially on growth in the euro area, while the outlook has been subject to further headwinds from trade tariffs. January's preliminary PMI reading was slightly improved at 50.2 from 49.6 in December but still consistent with an economy in which growth has essentially stalled.   

From a local perspective, attention is laser focused on next week's long-awaited Q4 CPI report. The key outturns are set to decide whether or not the RBA delivers on a 25bps rate hike in February that markets have already largely priced in. Consensus is for headline CPI to print at 0.4%q/q and 0.6%q/q on the trimmed mean or core rate. Watch out for my full preview of the CPI report ahead of the release.   

Macro (Re)view (17/1) | Higher yields meet resistance

Inflation data in the US and the UK came in below expectations this week, sparking a bond market rally that finally delivered resistance to the steep rise in yields since the back end of last year. This drove higher equities and a weaker US dollar, with the Japanese Yen boosted further by increased signs that the BoJ is preparing to hike rates next week. The AUDUSD pair lifted from lows dating back to the pandemic; strong Australian labour market data looks to have largely played an auxiliary role in the move as markets continue to price in a strong chance of an RBA rate cut in February. 

After last week's very strong US payrolls report lowered expectations for the Fed to cut rates just once in 2025, below consensus inflation data restored pricing for two cuts this year into favouritism with markets. Concerns over robust economic conditions renewing inflation pressures eased somewhat as core CPI printed at 0.2%m/m (vs 0.3% expected) in December - its slowest rise in 4 months - softening from 3.3% to 3.2%yr (vs 3.3%). At the same time, markets looked through a 0.4%m/m rise in headline CPI - its strongest since March driven by higher fuel prices - that lifted the annual pace from 2.7% to 2.9% as both outcomes matched expectations. 

The core CPI reading together with producer prices rising by less than expected on a headline (0.2%m/m, 3.3%yr) and core basis (0.0%m/m, 3.5%yr) left markets encouraged that while the economy is strong, disinflationary trends have not been derailed. That narrative was given support by a goldilocks retail sales report for December: headline sales lifted by a solid 0.4%m/m but were weaker than the 0.6% rise expected, while control group sales surprised to the upside at 0.7%m/m against 0.4% forecast. 

Softer than expected UK December inflation figures were a welcome circuit breaker to the upward pressure on gilt yields. Headline CPI printed at 0.3%m/m (vs 0.4%) to see the 12-month pace slow from 2.6% to 2.5% (vs 2.6%), while a 0.3%m/m reading saw the 12-month core rate ease from 3.5% to 3.2% (vs 3.4%). The key aspect of the report was a cooling in services inflation, down from 5.0% to 4.4% (a low since March 2022) giving a green light signal for markets to move towards fully pricing in a February BoE rate cut. 

Over in the euro area, the account of the ECB's December meeting reaffirmed the Governing Council remains on an easing path. In a dovish tilt, the ECB removed its tightening bias to 'remain sufficiently restrictive' on interest rates replacing it with a line to 'ensure that inflation stabilises sustainably' at its 2% target. That shift reflects increasing confidence in the disinflationary process while also recognising that risks to the growth outlook - particularly from the implementation of trade tariffs under the Trump administration - could end up driving inflation well below target. 

The upcoming Q4 CPI report in Australia (due 29 January) has taken on added importance with market pricing remaining heavily weighted towards the RBA cutting rates in February (75% chance) amid the continuation of robust labour market conditions. Employment continually outperformed expectations in 2024, rounded out by a 56.3k acceleration in December - a multiple of the median estimate (15k) and of the outcome in November (28.2k). 

The strength of employment growth saw labour market conditions retighten over the back half of 2024. Although the unemployment rate ticked up from 3.9% to 4.0% in December, it averaged 4.0% over the final quarter - well below the RBA's forecast to rise to 4.3%. Meanwhile, the broader underemployment rate closed 2024 at 6.0% - a near 2-year low - with total underutilisation in the labour force holding at lows back to September 2023 at 10.0%. All of this was accompanied by the participation rate returning to record highs at 67.1%. My full review of the December labour force report can be accessed here. 

Australian employment 56.3k in December; unemployment rate 4%

Robust employment growth in Australia has continued with a 56.3k rise in December once again blitzing modest expectations (15k) - a common theme throughout 2024. Strong labour demand drove a retightening in the labour market over the back half of the year. Market reaction to today's report was muted, although perhaps what that reflects is that a hawkish repricing of RBA rate cut expectations for the February meeting amid the rally in global bonds overnight is hard work. Essentially, the domestic labour market gives the RBA no reason to cut, but markets are betting that the upcoming Q4 CPI release (January 29) might. 

By the numbers | December 

• Employment accelerated by a net 56.3k in December (part time +80k/full time -23.7k), significantly outperforming the 15k consensus figure following a 28.2k rise in November (revised down from 35.6k).
• After falling to an 8-month low of 3.9% in November, the unemployment rate lifted back to 4.0% in December - in line with expectations; however, the underemployment rate fell from 6.1% to 6.0% - its 4th consecutive decline - to be at its lowest since February 2023. Total labour force underutilisation remained at 10.0%, holding at a low back to September 2023.  

• Labour force participation returned to cycle highs in December rising to 67.1% from 67.0% in the prior month. The employment to population ratio increased from 64.3% to 64.5%, also at record highs. 

• Hours worked advanced at their fastest pace in 9 months lifting by 0.5% month-on-month from flat growth in November; base effects saw annual growth surge from 2.1% to 3.2% (hours in December 2023 fell 0.5%m/m). Across the quarter, hours worked increased by 0.6%. 

The details | December 

Employment closed out 2024 surging by a net 56.3k in December. The gain was driven entirely by an 80k increase in part time work, the segment's largest contribution since the reopening from the 2021 Covid lockdowns. Full time work fell in December (-23.7k), a soft finish to a stellar year in which two-thirds (299k) of the total increase in employment in 2024 (444k) was in the full time segment.  

Across the quarter, employment lifted by 97k (0.7%), a solid result to follow the very strong gain seen in the previous quarter of 153k (1.1%). Employment gains averaged a little over 32k per month in the final quarter of the year, a comfortably sustainable run rate going into 2025 supported by job vacancies that remain at high levels.

Despite edging back up to 4.0% in December the unemployment rate remains historically low, while the broader trend of the labour market retightening into year-end continued. The underemployment rate stood at 6.6% at the start of 2024 and lifted to 6.7% by May but went onto to decline over the back half to end the year at 6.0% - its lowest level since February 2023. Labour force underutilisation followed a similar pattern declining from 10.6% to 10.0% over the year, indicating that current labour market conditions resemble the historical tights of earlier cycles. 

One of the defining features of the current cycle is that the strength of labour demand has been matched with a response from the supply side. Labour force participation ended 2024 on record highs (67.1%), up more than 1.5ppts on pre-Covid levels. Meanwhile, the employment to population ratio (64.5%) - the share of Australians (of working age) in work - has never been higher. 

Hours worked lifted sharply by 0.5% in December to be up by 0.6% over the quarter. That compares to a 0.8% rise in quarterly hours in Q3. Annual growth accelerated from 2.1% to 3.2%, its fastest pace in 16 months - albeit flattered by base effects. For much of the past 18 months, employment growth has outpaced hours worked. Reflecting that dynamic, average monthly hours trended lower in 2024: the 12-month average was 135.5 hours, down from 137.8 hours in 2023.   

In summary | December 

The Australian labour market was in robust shape as the sun set on 2024. Employment increased strongly through the year, continually defying expectations to weaken alongside a slowing economy. This saw labour market conditions retighten into year-end, with the unemployment rate around historic lows at 4.0% and below RBA forecasts for 4.3%. That balances with record high labour force participation. Elevated job vacancies point to the current momentum of employment being sustainable in 2025. 

Preview: Labour Force Survey — December

Australia's labour force survey for the final month of 2024 is due from the ABS this morning (11:30 AEDT). Employment growth remained resilient throughout 2024 and labour market conditions were retightening as year-end approached - highlighted by the unemployment rate returning to a 3 handle in November. However, with inflation cooling, the RBA at its December opened the door to easing monetary policy in 2025. Accordingly, market pricing for a February rate cut has built up to around a 75% chance. A very strong report today is likely needed to drive a hawkish repricing of those expectations.    

December preview: Markets calling a subdued finish to 2024 

Markets go into today's report holding modest expectations. Employment is anticipated to slow to 15k in December from a 35.6k rise last time out, with the unemployment rate ticking back up to 4.0% from 3.9% in November. As the chart below shows, employment (green line) throughout 2024 has consistently defied expectations (yellow line) to cool amid slowing economic growth. The growing consensus is that the resilience in employment has been driven by the non-market (or government) sectors of the labour market.  

In light of the momentum in employment, the 15k forecast for December is a pessimistic call - particularly so given that in the 3 months to November employment gains averaged almost 36k per month. Although markets are clearly not anticipating a repeat of the declines in employment seen in the Decembers of 2022 (-11k) and 2023 (-59.4k), the outlook is for a subdued finish to 2024. I see the risks as skewed to the upside of the 15k consensus.  

On the back of expectations for a softer employment outcome, the unemployment rate is forecast to tick back up from 3.9% to 4.0%, partly reversing the decline seen in November. For context, the unemployment rate has averaged 4.0% over the past 3 months, in line with its average across 2024. Current RBA forecasts have unemployment lifting to 4.5% by the end of 2025.  

November recap: Unemployment rate falls back below 4% 

The national unemployment rate fell to an 8-month low of 3.9% in November from 4.1% in October, defying an expected rise to 4.2% as employment reaccelerated. Coming off a modest rise in the prior month (12.1k), employment lifted by 35.6k (full time +52.6k/part time -17.0k) in November to outperform the 25k consensus figure.

Alongside the lower unemployment rate, the broader underemployment rate declined from 6.2% to 6.1% - its lowest level in 2 years. Factoring in the declines in both measures, total labour force underutilisation tightened from 10.3% to 10.0% in November to stand at a 14-month low. Labour force participation eased slightly in the month from 67.1% to 67.0% but remained near cycle highs.  

Hours worked came in flat in November (0%m/m) as a 0.2% increase in hours worked in the full time segment was offset by a 1.1% fall in part time hours. Annual growth in total hours eased from 2.2% to 2.1%. Since the back end of 2023, employment growth has been outpacing growth in hours worked, resulting in average hours worked per month slowing from around 137 hours to 135 hours. 

Macro (Re)view (10/1) | Fragile start to 2025

Upward pressure on global bond rates through the early part of the year extended on the back of strong US payrolls data. A more hawkish Fed, deficit concerns, and the policies of the incoming Trump administration continue to be bandied around. Spillover effects hit the UK this week as surging gilt yields once again put renewed focus on the sustainability of fiscal settings, with the Sterling weakening sharply in response. Sentiment was also dented by ongoing low inflation in China - stimulus efforts so far have fallen flat with markets. The euro remained under pressure despite December inflation data rising from 2.2% to 2.4%yr on a headline basis and core prices holding a steady 2.7% pace. Markets are priced for 3-4 ECB rate cuts in 2025. 

A 256k rise in US nonfarm payrolls in December far exceeded modest expectations (165k) and saw the unemployment rate fall from 4.2% to 4.1%. The participation rate was steady at 62.5%, while average hourly earnings growth softened from 4% to 3.9%yr. Overall, labour market conditions are strong and pricing for further Fed easing has been pushed back into the second half of the year. The hawkish turn taken by the Fed at its December meeting was reflected in the minutes published this week.    

Market expectations for a February RBA rate cut have strengthened to a 75% chance on the back of the December meeting minutes (published on Christmas Eve) and this week's inflation data. The minutes formalised the shift communicated by the RBA at the December meeting from actively pushing back against lowering rates to a more data-dependent approach. Accordingly, the Board acknowledged for the first time that it is prepared to lower rates 'in due course' if the data comes in line with or deteriorates relative to the RBA's forecasts (due to be updated at the February meeting); however, stronger data would delay cuts. 

With increased scrutiny on the data flow, a decline in underlying or trimmed mean CPI from 3.5% to 3.2%yr in November bolstered pricing for a February start to RBA easing (reviewed here). Markets looked through an uptick in headline CPI from 2.1% to 2.3%yr due to that largely being driven timing differences in payments of state and federal government electricity rebate schemes. Meanwhile, an underwhelming 0.8% rise for November retail sales (vs 1% expected) confirmed the Black Friday sales event in 2024 as notably more subdued than in 2023, supporting the near-term RBA easing case (reviewed here). 

On the other hand, the labour market remains strong and conditions were clearly tightening late last year highlighted by the unemployment rate falling to 3.9%. Alongside this, national job vacancies rose 4.2% for the 3 months to November, their first quarterly increase since mid-2022. In other Australian news, dwelling approvals declined by 3.6% in November (see here), while the trade surplus widened to $7.1bn as exports accelerated (see here).