The ANZ Roy Morgan Weekly Consumer Confidence Index on Australia has been notably weak.

Last week was a 3rd straight big fall and will weigh on household spending, consumption ... and economic growth in turn.

I posted last week:

Business conditions and confidence indicators have been solid, indeed improving.Consumer measures though ... well, you can see for yourself above. Reasons? Perhaps:

  • Higher energy costs (electricity) and more to come
  • Slow growth in wages
  • Politics in Australia (ongoing dual citizenship debacle)

The outlook for today, via ANZ:

ANZ-Roy Morgan Consumer Confidence fell last week and is now down sharply from its recent high and below its long-run average.

  • Looking through the volatility, we think the soft tone of consumer confidence largely reflects weak wage growth and the absence of any positive offsets such as the RBA rate cuts that boosted confidence in 2016.

While consumer confidence is soft, it is not unduly weak.

  • At this stage, it is not suggesting to us that consumer spending will slow materially from its current annual pace, especially when we factor in the boost that household incomes will receive in Q2 from higher hours worked and in Q3 from the increase in the minimum wage and the reduction in the deficit levy.
  • But acceleration in household spending looks unlikely without a lift in sentiment.
  • That, in turn, will likely require a material lift in wage growth, which seems unlikely anytime soon.
  • All of which implies above trend GDP growth will be difficult to achieve.

Also from ANZ, this time on the Australian dollar (this from a post late last week):

  • GDP forecasts for Q2 have already been tweaked higher and upside surprises in this week's partials - construction work done and capex would firm these expectations and add further support to the AUD on crosses.
  • But growth alone is not enough to trigger a shift in the RBA bias, just yet. So, we would use this opportunity to sell the rallies.

And, on stretched AUD positioning (leveraged trader data via CFTC):

  • Overall net long AUD positioning increased for the eleventh consecutive week to reach the highest since April 2013