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
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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
