Westpac:

  • The six-month annualised growth rate in the Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, rose from -0.19% in November to -0.15% in December.

As part of the report WPAC comments on their outlook for the February 1 RBA meeting:

  • Westpac expects that the Board will decide to cease its purchases of government bonds, bringing an end to the $350 billion program.
  • That will be justified on the recent evidence of success in achieving the Bank’s inflation and employment goals while it will also be guided by the moves by the FOMC to sharply scale back its own programs.
  • The Bank will also release a revised set of economic forecasts which we expect will be a first step towards making the case for an interest rate increase which Westpac expects in August this year.