Australian weekly consumer sentiment falls on RBA’s downgrade of economic outlook

Australian weekly consumer sentiment eases. Last week, the ANZ-Roy Morgan Australian consumer confidence index fell 3.4 percent, with all the confidence subindices falling. The fall took the index to a three-month low. Current financial conditions dropped 7.1 percent. Sentiment toward current financial conditions is back to where it was in November, but still quite some way above the long-run average. Future financial conditions dropped at a more subdued rate of 1.6 percent.

Meanwhile, current economic conditions dropped 3.2 percent, its first fall after three consecutive weekly gains, while future economic conditions dropped 3.8 percent. The ‘time to buy a household item’ index dropped 1.6 percent, its fourth straight weekly loss and taking it back to where it was at the end of October. Four-week moving average inflation expectations came in stable at 4.1 percent.

Consumer sentiment dropped last week most likely on the back of the RBA’s downgrade to its economic outlook, noted ANZ’s head of Australian Economics, David Plank. The decline reversed all the gains and then some since the soft reading seen at the beginning of this year.

“Weak retail sales and building approvals data may also have negatively impacted sentiment. Confidence still remains above the long-run average, however, as does the key current financial conditions sub-index. So we aren’t giving up on the consumer just yet”, added David Plank.

At 11:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was neutral at 26.9161, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 27.4735 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex