- Westpac Consumer Confidence Index (s.a.) for June +0.2% m/m, (prior was -6.8% to 92.9)
- Rises to 93.2
Westpac comments:
- Sentiment has stabilised after registering a sharp fall in the wake of the Federal Budget last month
- The Index is still in firmly pessimistic territory
- Down 6.6% from its pre-Budget level in April and 15.6% below its post-election high in November last year
- The absence of a significant bounce in sentiment in June is disappointing
The Reserve Bank Board next meets on July 1. The Governor’s statement accompanying the June Board meeting reiterated the view that the “the most prudent course is likely to be a period of stability in interest rates”. While the continued weakness in the Westpac-Melbourne Institute Consumer Sentiment Index is likely to be viewed as a temporary reaction to the Budget, the soft patch in consumer spending it points to argues that the Bank’s on hold position is entirely appropriate. Westpac’s view is that the case for higher interest rates will not be sufficiently strong until the middle of 2015 at the earliest.
