Australia: Stabilization in consumer Sentiment - Westpac

Bill Evans, Research Analyst at Westpac, notes that Australia’s Westpac Melbourne Institute Index of Consumer Sentiment declined 0.6% to 102.4 in April from 103.0 in March.

Key Quotes

“Sentiment continues to hold in slightly optimistic territory with April marking the fifth consecutive month the Index has been above the 100 level, indicating optimists outnumber pessimists. That is a more encouraging signal than we saw in most of 2017 when pessimists outnumbered optimists.”

“However the 10% rally we saw in the Index through the second half of 2017 has stalled. Indeed, since the beginning of the year the Index has fallen by around 2.5%.”

“Certainly, at 102.4 the Index is still well below the strong 105–115 levels typically associated with a robust consumer.”

“The Reserve Bank Board next meets on May 1.There is little chance of a move by the Board at this meeting. Indeed markets which six months ago were fully priced for a rate hike by August 2018 are now not priced for a move until mid- 2019.”

“Westpac continues to expect the cash rate will remain on hold through 2018 and 2019.”