Australia’s Performance of Construction Index fell to 46.4 in June, showing the building sector shrank for the first time in six months according to figures released by the Australian Industry Group (AiG). The slowdown came from on the back of a sharp drop in private house construction along with significant declines on gauges tracking new orders, employment and deliveries. The outcome likely reflects continued fallout from the RBA’s aggressive round of interest rate hikes that saw policymakers tack on 1.5 percentage points to benchmark borrowing costs between September 2009 and May of this year, hinting the central bank is likely to remain on the sidelines after opting to hold rates unchanged for the second consecutive month in July. The markets agree, with a Credit Suisse gauge of policy expectations showing traders price in no changes over the next 12 months.
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