Reece Birtles

Despite continuing strong economic data for Australia, markets have forecast significant earnings downgrades, and results have been mixed so far. But a main highlight – CBA’s record $10 billion profit – may not be enough to improve investors’ outlook on the banking sector, analysts say.

With deteriorating economic conditions dampening the banking outlook, some trading momentum may be leaving the sector after a strong two-month run. Six in 10 trades of big-four banks on the Selfwealth platform in July were sell orders, and headwinds are only picking up from here.