Investing.com -- After Friday’s jobs report cemented expectations that the Federal Reserve will keep interest rates on hold later this month, the economic calendar will be lighter in the coming holiday-shortened week. Stocks go into September after notching up strong weekly gains last week, while data out of China will likely add to concerns over the outlook for the world’s number two economy. The Reserve Bank of Australia will likely stand pat for a third straight meeting and supply worries look set to underpin oil prices.

U.S. economic data, Fedspeak

Friday’s jobs report was the latest in a series of economic data indicating that the economy is heading for a so-called soft landing, adding to the view that the Fed is nearing the end of its rate hiking cycle.

Data in the week ahead is unlikely to do anything to alter this view significantly.

On Wednesday the Institute for Supply Management will release August data on service sector activity, with economists expecting it to soften slightly.

The same day the Fed will publish its Beige Book, a survey of economic activity across all the bank’s 12 districts.

Investors will also get the chance to hear from several Fed speakers during the coming week, including Dallas Fed President Lorie Logan, who speaks Wednesday followed a day later by appearances from New York Fed President John Williams, Governor Michelle Bowman, Governor Michael Barr and Chicago Fed President Austan Goolsbee.

Stocks kick off September

The Dow and the Nasdaq climbed 1.4% and 3.2% last week, respectively, posting their strongest weekly performances since July. The S&P 500 gained 2.5% for its best week since June.

Friday’s jobs report bolstered expectations for the Fed to pause rate hikes at its meeting later this month.

"The data makes the case for the Fed becoming more dovish as we head into the fall. If the end of tightening comes sooner than later, that could lead to a substantial rally in stocks," Keith Buchanan, a portfolio manager at GLOBALT Investments in Atlanta told Reuters.

Interest rate futures suggest traders now see a 94% chance the U.S. central bank will keep interest rates unchanged at its Sept. 19-20 meeting, according to Investing.com’s Fed rate monitor tool.

The U.S. stock market will remain closed on Monday for the Labor Day holiday.

China data

Economic data out of China in the coming week is likely to indicate that the economic recovery in the world’s second largest economy remains fragile amid weak demand in key export markets and a deepening domestic property crisis which has added to downward pressure on growth.

The Caixin services PMI for August is due on Tuesday and is expected to show the expansion in the service sector slowing slightly last month.

Trade data on Thursday is forecast to show that exports and imports contracted again in August from a year earlier, albeit at a slower pace than in July.

Market watchers will also be looking to August CPI data on Saturday with consumer prices expected to tick higher after slipping into deflation territory in July.

Chinese authorities have rolled out a series of measures aimed at reviving the faltering economy, but many analysts see only a slim chance for more drastic stimulus amid concerns over mounting debt risks.

Oil surges on supply concerns

Oil prices surged to their highest level in more than seven months on Friday, snapping two weeks of losses amid concerns over the tightening supply outlook.

For the week, Brent rose about 4.8%, the most it has increased in a week since late July. Crude Oil WTI Futures advanced by 7.2%, their biggest weekly gain since March.

Saudi Arabia is widely expected to extend a voluntary 1 million barrel per day oil production cut into October, prolonging supply curbs engineered by the Organization of the Petroleum Exporting Countries (OPEC) and allies, known collectively as OPEC+, to support prices.

"There is a realization the economy is not falling off the map, and signs that demand is near record highs," said Price Futures Group analyst Phil Flynn. "People have to face the cold, hard reality that supplies are below average."

The demand outlook in the U.S. remains robust, with commercial crude inventories declining in five of the most recent six weeks according to data from the U.S. Energy Information Administration.

Reserve Bank of Australia decision

The RBA is expected to hold rates steady for a third straight meeting on Tuesday, after recent data pointing to a faster-than-anticipated cooling in inflation.

Rates are at an 11-year high of 4.1% after 400 basis points of increases since May 2022. Traders expect that to be the peak, after inflation unexpectedly eased to 4.9% year-on-year in July, the lowest rate since it peaked last December at 8.4%.

In addition, the most recent jobs report showed that the unemployment rate rose to 3.7% in July from 3.5% in the prior month, adding to expectations for the RBA to stand pat.

--Reuters contributed to this report

By Lucia Mutikani

WASHINGTON (Reuters) - U.S. job growth likely slowed in August, partly reflecting striking Hollywood actors and the bankruptcy of a major trucking company, but the unemployment rate probably held at more than 50-year lows as labor market conditions remain tight.

There is a tendency for the initial nonfarm payrolls count to be weaker in August. As such, economists are cautioning against reading too much into any sharp deceleration in job gains when the Labor Department's publishes its closely watched employment report on Friday.

Investors should focus on the trend, which will likely show a gradual loosening of the labor market because of the Federal Reserve's hefty interest rate increases to cool demand in the economy, economists said. The report, which is also expected to show moderate monthly wage growth, is seen reinforcing views that the U.S. central bank will not hike rates this month.

"There's going to be noise, but look at the trend, which is sort of a gentle slope downwards, it's not like anything really abrupt," said Brian Bethune, an economics professor at Boston College. "We're in a transition phase, so we have to be careful we don't throw the baby with the bath water."

Nonfarm payrolls likely increased by 170,000 jobs last month after rising 187,000 in July, according to a Reuters survey of economists. That would be the third straight month of job gains under 200,000 since December 2020. Still, employment growth would be more than the roughly 100,000 jobs per month needed to keep up with the increase in the working age population.

The Labor Department's Bureau of Labor Statistics, which compiles the employment report, reported that there were almost 18,000 workers on strike during the period it gathered data for August's report, including 16,000 Screen Actors Guild-American Federation of Television and Radio Artists members.

Striking workers are not counted as employed. Yellow (OTC:YELLQ) Corp trucking filed for Chapter 11 bankruptcy in early August, leaving about 30,000 workers unemployed. These two factors will impose a one-time drag on employment. August payrolls also have a tendency to initially print weaker relative to the consensus estimate and recent trend before being revised higher later.

"The initial August payroll change has been under-reported and then revised higher with the September and October employment reports in 12 of the last 14 years," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York. "August payrolls have also initially printed weaker than the prior three-month average change for 12 straight years, and have come in below consensus forecasts in nine of the last 12 years."

Economists had no explanation for this phenomenon. Signs are mounting that demand for labor is slowing, though some services businesses like restaurants, bars and hotels remain desperate for workers. Job openings dropped to the lowest level in nearly 2-1/2 years in July, the government reported this week.

The slowdown in demand is, however, not being accompanied by a rise in layoffs, with companies largely retaining workers after difficulties hiring during the COVID-19 pandemic.

Economists say employers will cut hours for workers before resorting to mass layoffs. The average workweek is at three-year lows, with most industries back to pre-pandemic workweeks.

The unemployment rate is forecast to have been unchanged at 3.5%, a level not seen since 1969. It is below the Fed's latest median estimate of 4.1% by the fourth quarter of this year. With inflation generally slowing, most economists believe the central bank is done hiking rates.

Since March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25%-5.50% range. Financial markets expect the central bank will leave its benchmark overnight interest rate unchanged at its Sept. 19-20 policy meeting, according to the CME Group's (NASDAQ:CME) FedWatch Tool.

"We think the Fed is likely finished raising rates," said Dean Maki, chief economist at Point72 Asset Management in Stamford, Connecticut. "This (job growth) would be one more piece of evidence that would be consistent with that, but that also depends a lot on the upcoming inflation data."

With the labor market still tight, wage growth remains strong, though the pace of increase has slowed from early in the year. Average hourly earnings are forecast to have increased 0.3% in August after rising 0.4% in July.

In the 12 months through August, wages likely advanced 4.4%, matching July's gain.

"We suspect that July's reading was boosted by calendar effects, which reverses in August," said Ellen Zentner, chief U.S. economist at Morgan Stanley in New York. "July's payroll survey included more weekend days."

Solid wage gains are helping to underpin consumer spending and keeping a recession at bay, and creating a feedback loop that is keeping the labor market humming.

By Jonathan Cable

LONDON (Reuters) - British home prices will fall 4% this year, more than was thought a few months ago, as high interest rates and living costs keep potential buyers out of the property market despite a shortage of supply, a Reuters poll showed.

Average prices soared over 20% during the COVID pandemic as buyers took advantage of record-low interest rates and sought more living space, and from peak to trough are only expected to drop around 5%.

But, with inflation running at several multiples above its target, the Bank of England (BoE) embarked on an aggressive policy tightening road and has added 515 basis points to borrowing costs from just 0.10% in less than two years, making it much more expensive to pay off a mortgage.

Average home prices were predicted to fall 4% in total in calendar 2023, slightly more than a 3% drop predicted in a poll published in June but not as bad as some had expected earlier, the Aug. 14-30 poll of 18 market specialists showed.

The most pessimistic forecast was for a 10% fall, despite consumer prices expected to rise 7.5% this year, according to a separate Reuters poll.

They were expected to flatline in 2024 and rise a little over 3% the year after, little changed from the previous poll.

"Forward-looking indicators are continuing to show a decline in buyer demand and negative price expectations. This is largely the result of higher mortgage costs negatively impacting affordability and placing downward pressure on house prices," said Michael McGill at real estate firm CBRE.

"We expect prices to recover from 2024, underpinned by an improving economic backdrop."

There was evidence of a housing market slowdown in BoE data published on Wednesday as mortgage approvals by banks and building societies in July dropped more than expected, while property website Zoopla said the number of house purchases this year was on course to drop 21% to its lowest since 2012.

In London, where homes are usually far more expensive, prices were expected to fall 5% this year but increase more than nationally in the following two years with rises of 2% and 5% pencilled in.

However, there is a huge divergence between London boroughs.

"The London housing market ebbs and flows, yet is there really such a thing as a 'London property market' nowadays?" asked property consultant Russell Quirk.

"Can we truly categorise what happens in Kensington and Mayfair with oodles of foreign buyers hunting trophy homes, alongside the blue collar demographic of Barking and Dagenham?"

While the average asking price for a home in the capital was 672,961 pounds ($853,314) in August, according to property website Rightmove (OTC:RTMVY), a buyer in Kensington would expect to pay on average 1,667,486 pounds yet in Barking and Dagenham it was 367,526 pounds.

RENTAL STRESS

Those unable or unwilling to make it onto the property ladder will feel the pinch from surging rental costs.

When asked what would happen to average rents for the rest of the year all 13 respondents to an additional question said they would rise, including nine saying they would do so significantly.

So unsurprisingly 12 of 14 participants said rental affordablility would worsen over the coming year.

"The build-up of a long-term supply issue combined with soaring landlord costs are set to continue pushing up rents for the foreseeable future," said Aneisha Beveridge at estate agency Hamptons.

Private rental prices paid by tenants in Britain rose 5.3% in the 12 months to July, according to the Office for National Statistics.

($1 = 0.7886 pounds)

(For other stories from the Reuters quarterly housing market polls:)

By David Lawder

WASHINGTON (Reuters) - U.S. Treasury Secretary Janet Yellen will travel to New Delhi to participate in the G20 leaders summit from Sept. 7-10, making her fourth visit to India in 10 months, the Treasury Department said on Thursday.

Yellen intends to focus at the summit on strengthening the global economy and supporting low- and middle-income countries by advancing efforts on debt restructurings, the evolution of multilateral development banks (MDBs) and building International Monetary Fund trust fund resources, the Treasury said.

She will "continue to build momentum" for her drive to evolve the World Bank and other multilateral lenders to boost financing capacity to aid developing countries' clean energy transitions, tackle pandemics, fragility and conflict, it said.

The Treasury estimates that the lenders collectively can unlock $200 billion in new financing over a decade with balance sheet measures now being implemented or under discussion.

The Treasury said Yellen also will rally America's G20 allies to maintain economic support for Ukraine and increase costs on Russia over Moscow's continuing war in Ukraine. This includes supporting the G7-led price cap on Russian oil exports and efforts to strengthen global food security in the face of restrictions on Ukrainian grain exports.

At the same time, the Treasury said Yellen will work to deepen U.S. bilateral ties with India, a country she first described last November as a prime "friend-shoring" destination and alternative to China for U.S. investment and supply chains.

Treasury's statement did not mention specific bilateral meetings.

On the sidelines of last year's G20 Summit in Indonesia, Yellen met with the People's Bank of China's then-governor Yi Gang in first of several face-to-face meetings with senior Chinese officials in recent months to ease rocky U.S.-China ties, culminating in her visit to Beijing in July.

By Jihoon Lee

SEOUL (Reuters) - South Korea's factory activity weakened at a faster pace in August, extending its longest-ever slump by another month as export orders fell again, a private business survey showed on Friday.

The purchasing managers index (PMI) for South Korean manufacturers, compiled by S&P Global, stood at 48.9 in August on a seasonally adjusted basis, down from a 12-month high of 49.4 in July.

The sub-50 reading meant activity contracted for the 14th straight month, the longest downturn in the survey's history stretching back to April 2004.

Sub-indexes showed new export orders swung back to contraction, after their first increase in 17 months in July, keeping overall orders and output in contractionary territory for 14 months and 16 months, respectively.

In August, worries intensified over slowing economic growth in China, which had already been dragging down South Korea's exports amid weak demand.

"August PMI data signalled that South Korea's manufacturing sector saw a sustained deterioration in operating conditions," said Trevor Balchin, Economics Director at S&P Global Market Intelligence.

"The current downturns in output and new work are the longest in the survey history, although much less severe than those registered during the pandemic and global financial crisis."

On the inflation front, input prices rose again, after falling in July for the first time in more than three years. Still, output prices extended decline to a fourth straight month due to competitive pressures and client negotiations.

Suppliers' delivery times worsened for the first time in five months, as firms reported shipping delays and shortages of semiconductors in particular.

Still, stocks of finished goods fell at the fastest rate since December 2021, while backlogs of work declined at the slowest in nine months.

A measure of manufacturers' optimism for future output climbed to the highest level since June 2022, signalling some hope of a recovery in demand.

LIMA (Reuters) -Peruvian miner Minsur has announced an investment of at least $2 billion in five years as it expands its copper and tin operations, an executive told Reuters on Thursday.

Minsur is set to invest around $543 million in an underground project in Justa mine, which is owned by the firm and Chilean mining company Copec, Minsur corporate affairs executive Gonzalo Quijandria said in a phone interview with Reuters.

Another $381 million will be invested to expand the processing plant and to improve the Justa mine camp, which began operations in 2021, Quijandria said.

The mine produced 126,036 fine metric tons of copper last year and was the world's seventh most productive copper mine, according to official data.

Peru is the world's No. 2 copper producer.

Minsur also operates the only mine in Peru for tin, a relatively rare element, and produces about 9% of this metal globally, according to the company.

Regarding such a production, Quijandria said Minsur plans to invest $462 million in its tin production line and another $100 million in tin exploration projects in the country.

"They are sustaining investments that include new tailings dams in the San Rafael mine and improvements in the Pisco smelter," he said.

Minsur also plans to invest some $342 million in the modernization of its polymetallic producer Minera Raura.

Earlier on Thursday, Peru's ministry provided a different breakdown of figures from the company, and Reuters did not receive an immediate response to a query about the discrepancy.

The announcement followed a meeting between Minsur CEO Juan Luis Kruger and Peru's energy and mines minister, Oscar Vera.

The Mina Justa Subterranea project will be the second largest and most modern underground mine in Peru," the ministry said in a statement, adding that Minsur expects to present the first permits for the project in the first months of next year, with production expected to start in 2027.

By Timothy Aeppel

(Reuters) - Even a robot invasion can't beat a slowing economy.

Companies in North America sharply cut orders for the high-tech machines in the second quarter, according to data compiled by the Association for Advancing Automation, an industry group.

The slowdown in orders began at the end of last year, as rising interest rates and sagging economic growth curbed appetites for new robots, the group, also known as A3, said.

"We wouldn't even consider buying a robot right now," said Nancy Kleitsch, chief financial officer of ICON Injection Molding, a maker of plastic components in Phoenix.

Like many producers, ICON's business shot up during the COVID-19 pandemic, including demand for its plastic tubes used in pandemic testing. But demand for the tubes and other parts of the company's business have now slumped to levels not seen in at least seven years, Kleitsch said.

INFLATION, GROWTH WORRIES

Many other companies appear to share ICON's hesitation on robots. Factories and other industrial users, including e-commerce warehouses and medical testing companies, ordered 7,697 robots in the second quarter, a 37% decline from a year ago. That followed a 21% drop in the first quarter and 22% decline in the fourth quarter of last year.

Robot sales boomed through the pandemic, as producers scrambled to use the machines to churn out badly needed goods. Indeed, even with the slowdown that hit late last year, 2022 marked a record year for orders, according to A3.

But robots are just one type of equipment companies need, and other gauges of spending have held up somewhat better in the U.S. economy. Orders for non-defense capital goods excluding aircraft - closely watched by economists to track trends in business spending - rose 0.1% last month, according to the Commerce Department, suggesting that investments in a wide array of equipment could continue to grow after rebounding in the second quarter.

"It's not that we've soured on automating," Jeff Burnstein, president of A3, said in an interview with Reuters. "But when people are worried about inflation and the economy, it puts a damper on everything - they hold off."

Some industries appear to have over-invested in robots during the recent boom. E-commerce companies, for instance, rushed to build highly automated warehouses in anticipation of continued torrid growth in demand for goods. It hasn't. Another problem, said Burnstein, were companies that ordered too many robots as they feared supply-chain delays.

"They were worried they wouldn't get what they needed, so they overbought," he said. Burnstein added that A3 expects the softness in robot orders to continue until the fourth quarter or early next year.

WIDENING USES

One factor that helped drive robot sales over the past few years was a tight labor market. The unemployment rate in July - at 3.5% - was near levels last seen more than 50 years ago. But worker shortages are easing. Another gauge measuring U.S. job openings dropped to the lowest level in nearly 2-1/2 years in July as the labor market slowed, the Labor Department said on Tuesday.

Meanwhile, robots continue to worm their way into an ever-wider variety of jobs. In the past, they were concentrated in auto factories and their suppliers, which still make up a large share of all robot orders. But the A3 data shows that in recent years robots have spread to everything from construction sites - where they are now used to do tasks like laying down lines on floors to guide crews on where to install walls - to hospitals and food-processing plants.

Aaron Anderson, director of innovation at Swinerton, a large construction company based in Concord, California, said his company has started using a robot that drills holes in concrete ceilings, opening the way for plumbing other mechanical systems to be installed by workers.

But Anderson said it's difficult to justify the cost of buying one of the machines. Since construction projects vary in size and complexity, he said, there are spells when the robot isn't needed at all.

Swinerton's answer: It leases the machine instead, which costs far less.

By Sakura Murakami

TOKYO (Reuters) - Japan's defence ministry made a record spending request on Thursday of 7.7 trillion yen ($52.67 billion), for fiscal 2024, the latest step of a plan to boost defence spending by 43 trillion yen over five years.

The request is for the second year of Prime Minister Fumio Kishida's plan to double defence spending to 2% of gross domestic product by 2027 as it faces up to an increasingly assertive China and unpredictable North Korea.

The request comes as Japan's relations with China have deteriorated sharply with Japan last week beginning to dump treated radioactive water from its wrecked Fukushima nuclear plant into the sea. China has condemned the release and banned Japanese seafood imports.

The fiscal 2024 request, submitted to the Ministry of Finance, adds almost a trillion yen to the previous year's budget of 6.8 trillion yen. If approved, the budget will have increased spending by about a trillion yen from the previous year for an unprecedented two consecutive years.

The defence ministry plans to set aside more than 900 billion yen to secure ammunition and weapons, including new ship-to-air missiles, according to the budget request.

Some 600 billion yen will be used to strengthen logistics capabilities to deploy weapons and resources towards southwest island chains in the event of an emergency.

The budget includes funding for three new landing ships, for a total of 17 billion yen, 17 transport helicopters, for more than 300 billion yen, and a new specialised transport team to improve deployment capabilities, the defence ministry said in its request.

Japan will also put 75 billion yen towards jointly developing interceptor missile to counter hypersonic warheads with the United States, and 64 billion yen to creating next-generation fighter jets with Britain and Italy.

The record defence spending by the staunch U.S. ally comes after decades of pacifist policies. The United States in 1947 imposed a constitution on Japan that renounces war.

But concerns over China's maritime ambitions and military assertiveness, especially over Taiwan, and a belligerent and increasingly well armed North Korea have shifted thinking, as has Russia's invasion of Ukraine.

Japanese aggression before and during World War Two is still a cause of tension in relations with some countries in Asia and Japan has given assurances its growing military strength will not be used to threaten others.

Japan has said it will still prioritise diplomatic efforts and dialogue to avert misunderstandings.

By Stella Qiu

SYDNEY (Reuters) - Asian shares were set for their worst month since February, with sentiment hurt by still-gloomy China factory readings on Thursday, as investors awaited a barrage of U.S. data that could add to bets that interest rates have peaked.

Europe is likely to open in a subdued manner, with EUROSTOXX 50 futures up a slight 0.1%. Both S&P 500 futures and Nasdaq futures were little changed.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.3% and was headed for a monthly loss of 6.3%, the largest since February. Japan's Nikkei, however, gained 1%.

Data on Thursday showed China's manufacturing activity contracted for a fifth straight month in August, but the pace of declines moderated, while the expansion in services sector lost a little momentum.

"The latest official PMI data were not uniformly bad," said Robert Carnell, head of research, Asia-Pacific, at ING.

"Both series (manufacturing and services) seem to be converging on a point close to 50 consistent with an economy that is neither expanding nor contracting. Things could be worse. But markets are not likely to take too much comfort from this set of data."

Chinese blue-chips fell 0.6% while Hong Kong's Hang Seng Index gave up earlier gains to be off 0.5%, weighed by a 1.8% drop in property developers.

Shares in Baidu (NASDAQ:BIDU) and SenseTime gained 3.1% and 2.6%, respectively, as they launched artificial intelligence (AI) chatbots to the public after obtaining government approval.

China's largest private property developer Country Garden warned of default risks if its financial performance continues to deteriorate, fuelling concerns that piecemeal support measures from Chinese authorities are not enough to engineer a turnaround in a critical sector.

Despite the China gloom, the investor mood perked up in August, with a global confidence index (ICI) from State Street (NYSE:STT) Global Markets surging 11.4 points to 107.7, led by North America which recorded the strongest reading in a year on easing recession fears.

Overnight, Wall Street rose after a slew of U.S. economic indicators generally surprised to the downside, adding to bets that the Federal Reserve is done tightening and rate cuts next year could amount to more than 100 basis points.

Private payrolls clocked a 52.3% monthly drop, adding to signs of a softening in the labour market, while second-quarter GDP was revised lower.

Attention now turns to inflation numbers as measured by the U.S. personal consumption expenditures (PCE) on Thursday - the Federal Reserve's preferred gauge of inflation - and non-farm payrolls on Friday.

Action in the Treasuries market was muted after a brutal sell-off earlier this month. Ten-year yields held at 4.1140%, having steadied in the past few sessions. They were nonetheless 16 basis points higher in August.

Two-year yields stood at 4.8899% on Thursday, after briefly dipping to a three-week low of 4.8360% overnight.

There was, however, less cheer in Europe on the inflation front. Annual inflation in Germany and Spain barely slowed in August, against expectations, raising the stakes for the euro zone inflation numbers later in the day.

Bets that the European Central Bank will have to hike in September saw the euro surge on the yen, hitting a 15-year high of 159.76 yen overnight. It last hovered at 159.4 yen on Thursday.

Oil prices were mostly flat. Brent crude futures were little changed at $85.90 per barrel and U.S. West Texas Intermediate crude futures were steady at $81.67.

The gold price was slightly higher at $1,945.49 per ounce.

By Wayne Cole

SYDNEY (Reuters) - Australian business investment climbed to its highest since late 2015 in the June quarter as firms took advantage of tax breaks to splurge on new equipment, while plans for future spending were also upgraded in a much-needed boost to the economy.

Data from the Australian Bureau of Statistics on Thursday showed private capital spending climbed a real 2.8% in the second quarter from the previous quarter, handily beating forecasts of a 1.2% increase.

Spending of A$37.58 billion ($24.43 billion) was the highest since late 2015, while investment in equipment reached a record peak of A$17.53 billion.

The construction sector boasted the biggest gains as firms finally received deliveries of machinery and vehicles after lengthy supply-chain delays.

Firms also lifted spending plans for the fiscal year to June 2024 to A$157.8 billion, up 14.5% on the previous quarter.

The strength in investment is a welcome shot in the arm to economic growth given rising interest rates and painfully high inflation has taken a heavy toll on consumer spending.

Figures for gross domestic product (GDP) for the June quarter are due next week and analysts are tipping growth of only around 0.3%. That would see the annual pace slow to just 1.8%, the lowest since early 2021 when the economy was emerging from pandemic lockdowns.

Indeed, an extended period of sub-par growth lies ahead as the Reserve Bank of Australia (RBA) tries to curb inflation with interest rates at decade highs of 4.1%.

Inflation figures for July out on Wednesday suggested the policy was working, albeit gradually, and markets assume rates will again be held steady at the RBA's September policy meeting next week.

Investors also suspect the entire tightening cycle might now be over as futures imply only around a 40% chance of a hike by year end.

Nomura economist Andrew Ticehurst cautioned there was a risk of perhaps one final rate rise in November, though it would be a very close call.

"At the same time, the latest data support our broader views that the economy will skirt with recession and inflation will ease further over coming quarters, and that the RBA could commence a more aggressive easing cycle than is currently priced, next year," he said.

He is tipping three quarter-point cuts in 2024 starting in May, while markets are leaning toward just one easing late in the year.

($1 = 1.5370 Australian dollars)