Westpac Economic's Weekly update

This week, the focus has certainly been on China and Greece. For the former, the sharp equity market decline (as per the rapid rise) has little to nothing to do with their real economy and everything to do with the accumulation of margin debt and strong growth in equity investment (from very low levels) by households. In Greece, both sides are far apart as we head into the crucial weekend of meetings. All the while Greece's economy deteriorates. For the RBA, little seems to have changed between June and July, with a further decline in the AUD desired and concerns over the investment outlook apparent. In the US, the FOMC very clearly wants to raise rates from September, but they are becoming anxious, over both the domestic spending pulse and the potential impact of global developments.