Australian consumer sentiment dropped for the second consecutive week. The ANZ-Roy Morgan Australian consumer confidence index dropped 2 percent last week, but it continues to be above the long-term average. ‘Time to buy a household item’ was the only ‘green shoot’, recording a strong rise of 4.9 percent.
Current financial conditions dropped 2.7 percent, while sentiment toward future finances fell 2.2 percent. This weekly fall has led to the subindices closing below their long-term averages. Current economic conditions fell significantly by 7.8 percent after rising for three straight weeks. It is still somewhat above the long-run average. Future economic conditions dropped 2.8 percent, which resulted in the subindex dropping below the long-term average.
The four-week moving average for inflation expectations dropped 0.2 percentage points to 3.8 percent, with the weekly reading down to a very low 3.6 percent.
“Weak Q1 GDP and the soft retail figure for April have seen consumer confidence move lower over the past week, despite the rate cut from the RBA. Looking back to the rate cuts in 2015 and 2016, there was no tendency for confidence to rise immediately following the move lower in rates. So it’s not particularly surprising that there has been no immediate boost from the rate cut. Inflation expectations readings below 4 percent seem to have become the norm in the past couple of month, which is unique in the history of this survey and something the RBA will be taking note of”, commented ANZ Head of Australian Economics, David Plank.
At 11:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was bearish at -76.444, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 39.2213. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex