Thanks so much for joining us now.

It's obviously been a big couple of weeks with, I suppose, the increasing threat now the Corona virus.

Interesting though this wake that J P figures for the last quarter were better than expected a little bit better, still pointing to pretty subdued momentum coming into this shock of the Australian economy growing 2.2% for the full year and sick and half was around about that pay still well below trend on dhe you.

While we're seeing a little bit improvement of the second half, it wasn't clear that that convincing.

We've got some a big one off some there around the real estate market, reigniting on around the inventory buildups that obviously aren't going to sustain growth.

Now we had The Treasury secretary is well telling a parliamentary committee this week that he expects about 10.5% to be shaved off March growth.

Do you agree?

Do you see this is likely worst.

So that's that's our current estimate, a preliminary estimate that she was around about 2.5 shapes taking greater absolutely zero for the first quarter.

For Australia, that was a primary assessment when the virus outbreak was pretty clearly disrupting China.

What was seeing now with more cases outside of China, that within China, particular hot spots like Italy and Career and on Iran over 10,000 cases now across those three countries align looks like we'll get a second round of disruption, particularly through tourism and travel, most likely impeding the global supply chains and global growth in the second quarter.

So certainly as that flows through to Australia, there's another as secondary impact that we're still assessing at this stage.

But I think that's more likely have fallen too cute too well on that point, they don't cue, too, you know that.

Zero.

How far off are we then from negative and then how?

What?

What are we looking like in terms of the possibility of a recession?

Well, look, it's a non trivial risk, a technical recession under these circumstances, a za clear possibility.

You know, the disruption, the impact, particular consumer spending now that we know, the big change over the last couple of weeks is the way the virus has accelerated its spread, but also the way it's starting to flow through the financial markets on is now constituting a wider shock to consumer confidence and spending.

So certainly that becomes, ah kee risk of a technical recession in the second quarter.

Against that, I think we need to bear in mind that we are studying Seymour of a policy response to the R V.

A on the field have moved over the last week.

You know, we think there's Maur policy stimulus to come, and clearly the government is also mobilizing around fiscal measures as well.

All of these things, a lot of moving parts now around this situation, both negative but also some positives on that.

On that fiscal stimulus trust, Feinberg treasure is indicated they will be a stimulus package of some sort.

In what form do you think that should take?

So I think it needs to be more defensive.

I think some of it needs to go to straight to the calming.

The panic in the consumer space on providing some some injection of the key take out from the GDP this week is that one of the key take out is that the consumers still very much out of sorts a little bit better, but, you know, they were the driver of the weakness last year.

They're coming into this shock not in great shape.

And there's a clearly a confidence element so that clearly you need more defense.

It's tow any policy response.

The front line needs to be around health policy on ensuring a rapid response and targeting area the spot fires for for outbreaks and calming the public at large that there is now a clear mobilization of health resources that is directed at containing the virus sickened.

To that, I think you need to have policies looking to cushion the sectors that of most heavily impacted, clearly tourism education on likely some of the retail that's in the public space, those areas where I think of repertoire cushioning measures on the idea that this would be a temporary disruption so you don't want business is going out of business laying off workers because we've maybe got a 6 to 9 months disruption.

They need to be able to count on the fact that they should be viable businesses in a couple of years time and draw on that and then thirdly side interrupted.

Thirdly, we do need some wider economic stimulus to generate a bit more momentum across the broader economy.

So I think at least those three you mentioned the movement by the R B.

A cut rate.

Since it surprise you, that was, it should be said handed on very quickly by Westpac in or Andi other majors.

There was some commentary by the prime Minister, perhaps pushing that along, but the right cut.

Are you surprised they went so early?

Because I mean what we're dealing with Supply issue, eyes cut to rights, Really gonna make any difference.

Do you think?

Well, it will it imagine.

I don't think it's something.

That's what we need.

This physical response, because ultimately no amount of interest rate cuts is going to encourage people to go on holidays and go out in public when there's a threat to life involved.

What it doesn't.

The margin, though, is it lowers the carrying cost of debt s O for small businesses, households in particular, you know, their their ability of serviced.

It gets a little bit easier to imagine.

It gives a little bit of a catch for objection at the margin, but it's not going to really snap a TTE the economy.

It's about cushioning the economy rather than driving it.

And Upton And I think we sort of saying that with the reaction to the feds.

50 basis point cut, Yes, it was a welcome to begin with, but in and of itself, it's not seen as sufficient to really.

It's cushioning a slowdown rather than driving it.

And you're looking in another cup for April.

Yeah, we think they'll move again in April.

And Red, really, given the situation's pretty live in particular in the US, in particular the U.

S.

Being so much more sensitive to confidence around the consumer space, there's a clear risk that the federal may need to go further with its policy easing to try and push in this effect and just quickly on housing.

You mentioned some actually, some movement there, some good news there on housing, but it's just going to start affecting that bright spot.

What that was housing well, clearly housings In a separate situation in the water economy, we've entered a clear rebound of a strong rebound since middle last year for the housing market's become more convincing.

Carried into early 2020 tow January February how these shocks play through the housing market.

It's quite complex.

On the one hand, you know, that's the most interest rate sensitive sector of the economy.

Saw further, right cut, particularly having being passed on completely toe variable rates does give you a little bit more momentum on that front.

I think the key for housing or what we find when it comes Thio House purchase decisions, interest rates, sittings are important.

Affordability is important.

Sentiment around the housing market is important.

But the other key element is the sense of consumers job security.

That's the thing that can put these big ticket decisions, like House Purchase on hold.

So for me again, that labor market piece where the consumers start to freeze up because of concerns about losing their jobs, that will be a key element to the reaction of the housing market over the next few months.

So far, it doesn't look too being anything.

Other option results for the first few weeks of February on March have been a very strong, but the next few weeks we'll start to see some of these elements from the Corona virus effects start to come through into housing, and the key aspect will be where the consumers who were previously planning to buy go on hold.