Westpac Leading Index for June

  • The 6-month deviation from trend growth rate measure is +0.06% m/m (prior -0.02%)
  • The 6-month deviation from trend, says WPAC, indicates the likely pace of economic activity 3-9 months in the future. -0.02% to 0.06% is hardly a good result .... IMO


Comments from Bill Evans, Westpac Chief Economist on the RBA (bolding mine):

  • Having cut rates in both February and May the August meeting does become a 'live' event
  • However we expect that it is very unlikely that the Board will decide to cut rates in August
  • In May it was still forecasting above trend growth in 2016 of 3.25% and we expect that the catalyst for any decision to cut rates would come from a substantial downward revision to its growth forecast for 2016 to 'below trend' territory.
  • That decision will be largely influenced by the assessed momentum in the economy in the second half of this year and developments in the labour market
  • With insufficient available evidence on the former and, for now, the unemployment rate having stabilised there is almost no case for an August move