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Leading Index Close To Neutral

AUSTRALIA DATA
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Westpac’s leading index for April fell 0.03% m/m after -0.05% resulting in the 6-month annualised change moving closer to neutral at -0.01% after -0.08% in March. This latter measure leads growth compared to trend by 3 to 9 months and so is signalling soft momentum well into H2. Inflation, rate rises and higher tax payments are providing less of drag on growth and upcoming tax cuts should be a support.

  • Westpac expects growth to improve to 1.9% in H2 2024 up from 1.3% in H1 but it estimates trend at around 2.5%.
  • The leading index has been supported by equities, labour market (hours worked), consumer confidence and US IP over the last six months. The narrowing yield spread has weighed on the index while lower commodity prices are now a small drag.
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Westpac’s leading index for April fell 0.03% m/m after -0.05% resulting in the 6-month annualised change moving closer to neutral at -0.01% after -0.08% in March. This latter measure leads growth compared to trend by 3 to 9 months and so is signalling soft momentum well into H2. Inflation, rate rises and higher tax payments are providing less of drag on growth and upcoming tax cuts should be a support.

  • Westpac expects growth to improve to 1.9% in H2 2024 up from 1.3% in H1 but it estimates trend at around 2.5%.
  • The leading index has been supported by equities, labour market (hours worked), consumer confidence and US IP over the last six months. The narrowing yield spread has weighed on the index while lower commodity prices are now a small drag.