Earlier posts on the Reserve Bank of Australia minutes:
- RBA minutes - analyst responses coming in. Here's another.
- RBA minutes - analyst responses coming in
- RBA July meeting minutes - says again rising AUD complicates rebalancing
- RBA July meeting minutes recap - upbeat comments help AUD higher
One thing I haven't seen anything on is this in the minutes:
- Members noted that wholesale electricity prices had risen sharply over the first half of 2017 and that this had led to significant increases in prices for retail customers. Members discussed these increases in the context of efforts to address climate change and to alter Australia's energy mix. Concerns about energy security, reliability and costs had been heightened over the preceding six months or so, partly reflecting policy uncertainty and its effect on the investment decisions of electricity generators. Members also discussed how developments in the LNG sector had affected the costs and decisions of electricity generators.
(bolding mine). The focus today is not on this, its on the upbeat tone of the minutes and the comments on the neutral rate at 3.5% (which implies a good amount of policy tightening to come). But ... this 'energy security' issue is going to be something to watch in coming months.
Particularly (as the RBA note) energy "policy uncertainty". Energy is a pretty big deal ...
On power prices, yes they are higher for industry (manufacturing and services alike) and may weigh on business conditions, confidence in coming months.
Not to put a dampener on the day ... just a wariness for months ahead.
