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Analysts at TD Securities point out that Australia’s Westpac Consumer sentiment print for July fell to 2yr lows, -4% m/m.

Key Quotes

“We had anticipated a bounce given the last survey covered the legislated tax cuts and RBA cut but there were substantial falls in expectations about personal finances and the economy over the next year and concerns about unemployment lifted sharply in NSW, Vic and WA. Let’s see if sentiment improves.”

“For Q2 wages, we forecast 0.55% q/q and 2.3% y/y. Annual wage growth has been moving at a glacial pace. At 2.3% y/y, this is tracking well below levels implied by the underutilisation rate that suggest annual wages growth should be closer to 2.9%. However we don’t expect wage pressures to pick up materially given there are more unemployed than there are vacancies.”