- Following today’s slide in Westpac’s consumer confidence, where markets were paying closer attention to considering the recent decline in various data inputs, such as weekly consumer sentiment data, and the more recent deterioration in both business conditions and business confidence indices, the Aussie is feeling the pressures again.
The consumer confidence numbers today arrived with the biggest slide since the end of 2017 erased the 4.3 percent rise in the previous month – down -4.8 percent in March. This month’s survey was conducted March 4-9 and would have taken up the weakness in the GDP report, housing market declines as well.
AUD/USD is reporting losses as Westpac consumer confidence tanked
RBA outlook – On hold for 2019 and 2020 – (ANZ)
Noting a slower H2 2018 data prompted markets to start pricing in an RBA rate cut over the coming year, with recent weakness in business conditions and consumer confidence and a shift in the RBA’s language adding impetus to that shift analysts at ANZ Bank explained that they believe the central bank will stay on hold in 2019 and 2020:
“Periods of low GDP growth have not always translated into higher unemployment and RBA easing. The Bank is more focused on trends in the unemployment rate and surprises on inflation than on GDP growth, as rate cut triggers…With interest rates at record lows, fiscal policy is the better tool for stimulating the economy. And we expect the April Budget to be stimulatory.”
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