The report makes for bleak reading. And the latest ANZ data suggests we are finally starting to see spending react to weak sentiment - albeit modestly.

We have upgraded our Australian CPI forecasts with headline inflation to peak at 8.0% y/y and trimmed mean at 6.6% y/y in Q4. #ausecon Catherine Birch

Rate hikes are hitting total AU housing lending ex refinancing, which is now $8.1bn down from its peak but still $7.6bn up from the average in 2019. While building approvals are down from homebuilder highs, rate hikes are not flowing through convincingly Adelaide Timbrell #ausecon

This is a really important change to Australia's standing in the world that matters for a number of reasons.

Australia’s super funds hold more than $3.5trn in assets. Of this, more than 16% is invested overseas. This has driven the shift in Australia’s net equity holdings: since 2013, Australians have owned more equity overseas than non-residents own in Australia.

Can’t stop won’t stop

Inflation expectations have surged in recent weeks. This has also driven consumer confidence lower. Which makes for a tough backdrop for RBA policy considerations.

Finally some respite from the relentless fall in confidence. But sentiment is still effectively at "recessionary" levels. So far this hasn't translated into a pullback in spending. Whether this disconnect continues is a key issue for the outlook and monetary policy.

International visitors are coming back to Australia, but a lack of arrivals from China is slowing the recovery. Arrivals from India are almost back at pre-COVID levels, and we think there’s lots of upside for the Indian tourist market. #ausecon Madeline Dunk Felicity Emmett

More and more the data on inflation and wages suggest Australia is lagging global trends rather than following a different path.

The Q4 WPI due in mid February is shaping up as a very critical data point. If it indicates wages growth is picking up sharply then a 4%+ cash rate may be needed.

ANZ-Roy Morgan Aus Consumer Confidence rose 1.8% (5.6% over the past three weeks) to its highest since early October. But it is still very weak. ‘Financial situation compared to a year ago’ up 9% and ‘Financial situation next year’ up 2.8% drove the rise. #ausecon David Plank

Spending on Black Friday was up this year compared to 2019. No doubt inflation has contributed to that but we see decent momentum pre and post Black Friday as well. November is shaping up as a bounce in retail compared to October.

Sydney housing prices have led the fall in Aus housing prices, but other capitals are following suit. We expect a peak-to-trough decline of 18%. #ausecon #housing Felicity Emmett Adelaide Timbrell

Policy outlooks for the RBA and RBNZ have diverged, despite seemingly similar inflation problems. We take a look at why. bit.ly/ANZ-Insight-RB…

Australia and New Zealand have similar inflation rates, but we expect the RBA cash rate to peak at 3.85% vs the RBNZ OCR at 5.75%. Structural factors and the central banks’ views on economic trade-offs, wages, inflation expectations and neutral rates are key differentials.

It's easy to attribute any data blip to the much anticipated Spending Slowdown. But the evidence is mounting. ANZ Consumer Confidence shows people have been worried for some time, pent up demand for travel could be waning, while inflation and interest rate pressures intensify.

ANZ-observed spending in the first week of 2023 was 4% lower than the first week of 2022, despite prices rising close to 8% in 2022 according to our CPI forecast. Households also spent less on key trading days in 2022 compared to 2020 and 2021. Adelaide Timbrell