Preliminary S&P Global / Judo Bank flash PMIs from Australia for July 2023. Disappointing results:

• composite flash PMI below 50.0 for the first time in half a year

From the report:

• main contributor to the soft
  reading for July was a dip in business activity for the
  services sector, which had previously been staging a
  recovery in 2023
• good news is that this gradual easing in activity
  will help take pressure off inflation and interest rates,
  but it will need to be sustained for the rest of 2023 and
  into 2024
• results also suggest that the Australian
  economy remains on the ‘narrow path’ for a soft
  landing
• economy is still growing with no signs of
  impending recession
• employment index fell again in July but remains
  in expansion above 50. Labour demand across the
  economy remains solid and above a level that we
  would typically see when output and new orders were
  as soft as they have been recently. This suggests that
  labour hoarding continues as activity slows.
• The concerning feature of the July Flash report is the
  price indicators which ticked higher in the month. The
  service sector inflation indicators remain elevated,
  consistent with inflation of around 4-5%, well above
  the RBA target of 2% to 3%.
  “The disinflationary trend evident in the PMI price
  indicators over the course of 2022 appears to have
  ceased. With the exception of manufactured good
  final prices, the inflation measures are at a level in July
  broadly similar to what we had at the start of 2023.

—

I bolded on jobs and inflation above, the twin concerns of the RBA. We have an important official inflation data reading due this week (Wednesday local time) that’ll be keenly eyed for the prospects on Reserve Bank of Australia rate hike at their meeting on August 1.

11.30 am time on the 26th is:

• 0130 GMT
• 2130 US Eastern time (on the 25th)

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