REPEAT:MNI:Australia Leading Index Point To Below-Trend Growth

Repeats Story Initially Transmitted at 00:30 GMT Jul 18/20:30 EST Jul 17

     SYDNEY (MNI) - From Westpac-Melbourne Institute's Leading Index for June

published Wednesday.

                                              June    May

---------------------------------------------------------

Leading Index                                97.77  97.76

6-Mo Annualized Deviation From Trend, % pts  -0.33  +0.05

     FACTORS: The leading index was little-changed in June but pointed to the

first below-trend reading since September last year, and the weakest index

growth since July 2017. This marks a significant reversal from a comfortable

above-trend reading of 0.68% in January to -0.33% in June. The biggest drags

came from a turnaround in the previously positive contribution from the

Westpac-MI Unemployment Expectations Index (-0.26ppts), reduced support from

commodity prices, measured in Australian dollar terms (-0.21ppts), and a

deepening contraction in dwelling approvals (-0.2ppts).

     TAKEAWAY: The signal from leading index compares with the Reserve Bank of

Australia's expectation that growth will hold at an above-trend level of 3% in

2018 and 2019. But Westpac says they will need further confirmation of this

below-trend movement to be comfortable of the shift to a below trend signal for

the growth outlook for the remainder of 2018 and into 2019. 

     COMMENTS: Westpac's chief economist Bill Evans said the signal from the

leading index is in line with their own growth forecasts, and he continues to

expect that the RBA cash rate will remain on hold throughout both 2018 and 2019.

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

[TOPICS: MTABLE]