a number of them are at multi - decade lows. the chinese economy is also growing solidly, although the pace of growth has slowed, partly as a result of efforts to put the financial sector on a more sustainable footing. the united states is most advanced in the process of monetary policy normalisation. this has led to a broad - based appreciation of the us dollar this year. as a consequence, the australian dollar has depreciated. if sustained, this could be expected to improve the outlook for both inflation and growth. notwithstanding the positive global picture, there are a number of international uncertainties that we are monitoring closely. one is the possibility of an escalation in the current trade disputes. if this were to happen, it would materially affect trade flows and investment plans around the world. as a country that has benefited greatly from an open rules - based international system, australia has a strong interest in this not happening. another uncertainty we are watching closely is the possibility of a material lift in inflation in the united states. the united states is experiencing a large fiscal stimulus at a time when the economy is at full employment and is growing quickly. this is an unusual combination to say the very least. past experience suggests that it could lead to inflation increasing significantly. financial markets are, however, heavily discounting this possibility, which means that if it did take place it would come as quite a surprise, with repercussions for markets and the real economy. we are also monitoring carefully the financial and economic problems in a number of emerging market economies with structural or institutional weaknesses, including turkey, brazil and argentina. if these problems were to escalate, they could put strains on parts of the global financial system. so these are some of the international issues we are keeping an eye on at the moment. domestically, the board is closely monitoring housing markets across the country and trends in housing finance. housing credit growth has slowed, which, from a medium - term perspective, is a positive development. our assessment is that this slowing largely reflects reduced demand for credit by investors, although there has been some tightening in the supply of credit as well. with housing prices falling in a number of cities, largely due to a shift in the underlying fundamentals, investors no longer find it as attractive to invest in residential property as they once did. this is a normal part of the cycle. while credit standards have been tightened, mortgage credit remains readily available. 2 / 4 bis central bankers'speeches i

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