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Free AccessMNI POLICY: Australia Sentiment Up But Housing Mkt A Risk
--Westpac-MI Consumer Sentiment Above 100 for 11 Straight Months
--View On Labor Market Solid Despite Small Drop
By Sophia Rodrigues
SYDNEY (MNI) - Consumer sentiment rose in October to stay in the optimistic
zone for 11 months in a row but the survey details were mixed with expectations
on the labor market supportive for growth and inflation outlook, while housing
market remains a risk.
Overall, the data is still supportive of the Reserve Bank of Australia's
narrative that the next move in the cash rate is more likely to be up, than
down, but much depends on how the housing market evolves in the months ahead and
the impact it has on household spending.
Data published by Westpac-Melbourne Institute Wednesday showed consumer
sentiment rose 1.0% m/m to 101.5, marking a small rebound from a 5.2% fall in
the two months prior.
The latest rise was likely a reflection of strong economic growth, solid
labor market and ongoing recoveries in the previously weak mining states.
But consumers remain concerned about interest rates and house prices.
Sentiment among households with a mortgage weakened further in October, down
0.8% to mark at total 6.4% fall in the last two months.
The "time to buy a dwelling" index fell 0.9% in October, after a 4.8% fall
in September, though it was still well above the lows seen through mid-2017,
indicating support for housing demand at lower prices.
Consumer expectations for house prices was very disappointing, falling 7.4%
in October to take the index to the lowest level since the survey question was
run in May 2009. House price expectations were particularly weak in New South
Wales and Victoria.
Expectations on the labor market also softened a little but the index on
unemployment expectations was still a solid 5% higher than a year ago.
Westpac's chief economist Bill Evans maintained his view that the RBA will
leave the cash rate on hold in 2018, 2019 and 2020.
From Westpac-Melbourne Institute Index of Consumer Sentiment for October
published Wednesday:
October September
----------------------------------------------------------
Sentiment Index 101.5 100.5
Current-Conditions Index 103.6 102.5
Expectations Index 100.1 99.2
Family Finances Vs Year Ago 87.4 85.2
Family Finances Next 12 Months 102.8 102.2
Economic Conditions Next 12 Months 100.2 100.2
Economic Conditions Next 5 Years 94.9 95.2
Good Time to Buy Major Household Items 119.8 119.7
--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com
[TOPICS: MTABLE,MALDS$,MMLRB$,M$A$$$,M$L$$$,MT$$$$]
To read the full story
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Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.