Craig James, Chief Economist Twitter: @CommSec IMPORTANT INFORMATION AND DISCLAIMER FOR RETAIL CLIENTS The Economic Insights Series provides general market-related commentary on Australian macroeconomic themes that have been selected for coverage by the Commonwealth Securities Limited (CommSec) Chief Economist. Economic Insights are not intended to be investment research reports. This report has been prepared without taking into account your objectives, financial situation or needs. It is not to be construed as a solicitation or an offer to buy or sell any securities or financial instruments, or as a recommendation and/or investment advice. Before acting on the information in this report, you should consider the appropriateness and suitability of the information, having regard to your own objectives, financial situation and needs and, if necessary, seek appropriate professional of financial advice. CommSec believes that the information in this report is correct and any opinions, conclusions or recommendations are reasonably held or made based on information available at the time of its compilation, but no representation or warranty is made as to the accuracy, reliability or completeness of any statements made in this report. Any opinions, conclusions or recommendations set forth in this report are subject to change without notice and may differ or be contrary to the opinions, conclusions or recommendations expressed by any other member of the Commonwealth Bank of Australia group of companies. CommSec is under no obligation to, and does not, update or keep current the information contained in this report. Neither Commonwealth Bank of Australia nor any of its affiliates or subsidiaries accepts liability for loss or damage arising out of the use of all or any part of this report. All material presented in this report, unless specifically indicated otherwise, is under copyright of CommSec. This report is approved and distributed in Australia by Commonwealth Securities Limited ABN 60 067 254 399, a wholly owned but not guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. This report is not directed to, nor intended for distribution to or use by, any person or entity who is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or that would subject any entity within the Commonwealth Bank group of companies to any registration or licensing requirement within such jurisdiction.

THE WEEK IN ECONOMICS & FINANCE

What happened in the past week? The Federal Government has announced a $211 million

investment in building new domestic fuel storage.

In August there were 60,860 overseas departures and 15,440 arrivals in Australia.

Minutes of the September 1 Reserve Bank Board meeting were released.

The Bureau of Statistics reported that Australian home prices fell by 1.8 per cent in the June quarter to stand 6.2 per cent higher over the year.

The weekly ANZ-Roy Morgan consumer confidence rating rose by 1.4 per cent to 92.4. Confidence has lifted in four of the past five weeks.

Chinese economic data for August largely exceeded analyst forecasts. Retail spending turned positive for the first time this year.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecast that the value of agricultural commodity exports could fall by 10.2 per cent to $43.5 billion in 2020/21.

In the week to September 14, used vehicle prices rose 3.4 per cent according to Datium Insights. Used vehicle prices in August were up 25 per cent on the year.

Private house sales rose 3.6 per cent in August. Sales for the three months to August were up 36.5 per cent on a year ago.

Employment rose by 111,000 in August (survey forecast: -35,000). The unemployment rate fell from a 22-year high of 7.5 per cent to 6.8 per cent in August (survey forecast: 7.7 per cent). It was the biggest monthly fall in the jobless rate in 32 years (July 1988).

The US Federal Reserve left the target range for the federal funds rate between zero and 0.25 per cent. All but four policymakers expect rates to remain near zero through to 2023. The Fed will target an inflation rate a little above 2%.

In the US, the Dow Jones index fell by 0.03 per cent last week (fell 1.7 per cent in the previous week). The S&P 500 lost 0.6 per cent (fell 2.5 per cent in the prior week).

September 19, 2020 2

Economic Insights. THE WEEK IN ECONOMICS & FINANCE

And the NASDAQ lost 0.6 per cent (fell by 4.1 per cent in the prior week).

In Australia over the week the ASX 200 rose by 0.1 per cent (fell 1.1 per cent the prior week). The All Ordinaries rose by 0.3 per cent (fell by 1.1 per cent in the prior week).

Some key points from recent economic & financial events:

Consumer confidence continues to improve

The US Federal Reserve expects rates near zero to 2023

The Chinese economy continues to recover

The job market continues to positively surprise

Some key economic & financial events ahead:

Australian finance & wealth data

Preliminary August retail trade

Population figures

Reserve Bank New Zealand rates decision