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    NAB May Business Survey: Unwavering non-mining recovery continues

    Today's NAB Business Conditions for the month of May came in at 10 vs 10 last (revised higher from 9), while confidence stood at 3 vs 5 last, with NAB noting that the Q1 National Accounts confirmed the positive trend seen in the NAB Business Survey for non-mining business activity, with a notable contribution to growth coming from the service sectors.Summary"This month’s NAB Business Survey remains true to theme of ongoing recovery in the non-mining economy, building on the already solid growth seen in the recent National Accounts. Services continue to lead the way, now including distributional services such as retail, while manufacturing has pulled back and mining (and related sectors) still look weak.""Overall, this outcome suggests that economic activity is holding up reasonably well, with the RBA more focussed on the inflation outlook – encouragingly, inflation indicators in the Survey picked-up a little this month. Financial markets have priced in another 25bp cut by year end, but without a very weak CPI result for Q2 and/or a markedly higher AUD, non-mining activity strength, together with financial stability concerns of even lower rates, are, on balance more likely to keep the RBA on hold."

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