Daily FNArena News - Australia

Inflation expectations are now at a two year high in Australia and Westpac economists believe the next official data release is likely to surprise on the upside.

According to Westpac housing affordability has fallen significantly in Brisbane, Melbourne and Adelaide and this may limit any price gains during the next upswing in housing.

Citi has assessed the reduction in production guidance announced by Minara Resources and decided the risks are too great, downgrading the stock to Sell from Buy.

Having had a perfect five-for-five Buy ratings last week Macquarie Leisure is even more popular after UBS and Austock both initiated coverage with Buy recommendations.

Credit Suisse suggests Perilya is cheap and has initiated coverage with a Buy rating given potential earnings upgrades from strong lead prices and longer-term growth options from new projects.

The strong rally in Australian equities since the credit crunch bottom has been driven almost exclusively by resource stocks.

ANZ economists believe the latest set of job ads data suggest demand for labour in Australia is “steadying”, but still growing.

August housing approval data show no end to the current deficit in supply, leading economists to forecast further gains in house prices and rents.

CommBank expects a structural change in global food markets will keep the pressure on inflation, UBS suggesting retailers are better placed than suppliers to deal with the change.

Australian retail trade data for August came in above market expectations, leading economists to suggest the case for an RBA rate hike in November is strengthening.