Artile written by Kyle Rodda, Ausbiz

Financial markets are flashing recession signals for the Australian economy. In this week’s editions of IG’s Macro Intelligence, we provide a health check of Australia’s economy, analyse the signals markets are sending about future policy and growth, and take a look at three markets to watch as the country teeters on the edge of recession.

The fundamentals: low unemployment, high inflation

A snapshot of the current state of the Australian economy paints a mixed picture. Joblessness remains historically low, with the unemployment rate floating around levels not seen for several decades. However, the economy is running above capacity. Inflation is still more than double the top of the RBA’s 2 – 3 percent target range.