Latest news with #MatthewHassan
Sky News AU
5 days ago
- Business
- Sky News AU
Reserve Bank of Australia's shock rate hold dampens the mood for Aussie shoppers, per Westpac's Consumer Sentiment Index
Consumer confidence jumped in July but was hurt by the Reserve Bank of Australia's shock rate hold that denied millions of Australians much-needed mortgage relief. The latest Consumer Sentiment Index from Westpac and the Melbourne Institute ticked up 0.6 per cent to 93.1 per cent in July. Based on a survey conducted from July 7 to 11, respondents reported an index read of 95.6 before the RBA held rates. This dived to 92 after the central bank held the cash rate. Westpac's head of Australian macro-forecasting Matthew Hassan said the reaction minimised what 'would probably have been a solid rise'. 'This is the third time since late last year that events have conspired to undermine promising improvements in the consumer mood,' Mr Hassan said in the report. 'Daily responses showed similar patterns in April (following the 'Liberation Day' tariff announcements) and back in November (when a milder RBA disappointment combined with a surprise US Presidential election result).' The consumer sentiment index tracks family finances, expectations for the economy and whether Aussies believe now is a good time to buy a major household item. Australians remain 'cautiously pessimistic' about the nation's economy as the index remains below positive territory (above 100). The recent result, however, is still greatly above the consumer sentiment index scores of 82.7 in July 2024 and 81.3 in July 2023. AMP economist My Bui said the weight of post-pandemic inflation had weighed on household budgets and hurt consumer confidence. 'The main reason for why consumer sentiment has been negative for so long (more than three years, the most outside of recessions) is because of very sluggish readings in family finances since the end of 2020,' Ms Bui said in a statement. 'Unsurprisingly, wage earners are still worse off than 2020 given that the rise in price levels (+20 per cent) has outpaced wages growth (+15 per cent).' Credit reporting agency CreditorWatch pointed to Donald Trump's trade war for the lower than expected consumer confidence increase. 'Tariff related uncertainties about the longer-term outlook for the economy are also restraining confidence somewhat, though even abstracting from this effect, consumers would still be slightly net pessimistic about the economy,' it said. The Reserve Bank of Australia earlier this month held the cash rate at 3.85 per cent, subverting widespread expectations it would cut rates by 25 basis points. This would have been the first consecutive rate cut since early 2020 and the third cut this year. Whether the RBA cuts rates at its next meeting in August depends on what the trimmed mean inflation figure for the June quarter is. RBA governor Michele Bullock said the shock hold was about 'timing' as the central bank needed more concrete information about how inflation was continuing to decline.
West Australian
6 days ago
- Business
- West Australian
RBA's hold keeps consumer sentiment recovery in check
Last week's move by the Reserve Bank to hold fire on a third interest rate cut for 2025 has failed to dampen the spirits of Australian consumers. But the shock decision that blindsided most market watchers did keep a lid on what would have been a solid gain in the monthly consumer sentiment index measured by big four bank Westpac and the Melbourne Institute. The index data, released on Tuesday, showed the recovery in consumer sentiment experienced another 'false start' in July — rising just 0.6 per cent to 93.1 — up from June's reading of 92.6. Westpac head of Australian macro-forecasting Matthew Hassan said responses over the survey week showed a clear disappointment following the RBA's move to leave the official cash rate on hold a 3.85 per cent — despite analysts saying ahead of the two-day meeting that a 25 basis-point cut was a near certainty. Mr Hassan said those surveyed before the decision reported an index read of 95.6 while those surveyed after reported it had dropped to 92. 'The reaction checked what would probably have been a solid rise,' he said. 'This is the third time since late last year that events have conspired to undermine promising improvements in the consumer mood. 'Daily responses showed similar patterns in April (following the Liberation Day tariff announcements) and back in November (when a milder RBA disappointment combined with a surprise US Presidential election result). 'The latest check to sentiment is less dramatic but it still leaves the consumer mood stuck at 'cautiously pessimistic' levels overall.' RBA governor Michele Bullock said last week the board would 'wait for a little more information' to be certain it had beaten inflation. The Westpac-Melbourne Institute survey found family finances improved for July but showed a sharper pull-back following the rates call. A family's current perception of their finances compared to a year ago posted a solid 5 per cent rise overall to 79.2. A family's confidence in their finances for the next 12 months posted a milder 2.6 per cent gain to 101.4, nudging back into net positive territory as households bank on signals from the RBA that more rate relief would be on the way when the time is right. The index's 'time to buy a major item' reading dropped 2.6 per cent to 97.6, partly unwinding last month's promising 7.5 per cent surge and dipping back into slight negative territory. 'The decision on interest rates may have tipped some consumers towards holding off on major purchases,' Mr Hassan said. But there were positive signs for Australia's overall economic fortunes over the next 12 months, with the index's outlook measure jumping 1.8 per cent to 94.1. Looking five years ahead, the measure rose 2.8 per cent to 93.4. 'Both sub-indexes are still marginally above historical averages but have struggled to sustain gains since the start of the year,' Mr Hassan said. 'Tariff-related uncertainty about the global economic backdrop continues to weigh particularly heavily on five-year views on the economy with this sub-index down nearly 8 per cent compared with March. 'Consumers are not overly concerned about the economy but appear unsure about which direction its heading in. '
Perth Now
6 days ago
- Business
- Perth Now
Australian shares gain as consumers' mood lifts
The local share market has moved higher as a long-running survey of Australian consumer sentiment posted another modest gain despite last week's surprise move on interest rates. At noon on Tuesday, the benchmark S&P/ASX200 index was up 36.7 points, or 0.43 per cent, to 8,607.1, while the broader All Ordinaries had gained 36.9 points, or 0.42 per cent, to 8,852.2. The Westpac-Melbourne Institute Consumer Sentiment survey, based on a poll of 1,200 Australian adults conducted last week, showed a lift for a third straight month. "While the mood improved a touch for the month as a whole, responses over the survey week show a clear disappointment following the RBA's surprise move to leave rates on hold at its July meeting," said Westpac's head of Australian macro forecasting, Matthew Hassan. AMP economist My Bui said that compared to the longer-term trend, Australian consumer confidence remained soft and way below its long run average. In China, the National Bureau of Statistics reported that the world's second-biggest economy grew at 5.2 per cent in the June quarter, slightly better than consensus estimates of 5.1 per cent growth. Ten of the ASX's 11 sectors were in the green at midday, with materials flat. Tech was the biggest mover, rising 2.1 per cent. Life360 had gained 9.0 per cent to an all-time high of $35.55, Appen had climbed 5.6 per cent to $1.135 and Weebit Nano had advanced 6.4 per cent. Eftpos providers Tyro Payments and Smartpay Holdings were down 5.2 and 1.9 per cent, respectively, after the Reserve Bank proposed banning surcharging on debit and credit cards. Hub24 had advanced 5.5 per cent to an all-time high of $99.71 after the wealth management platform announced strong growth in the fourth quarter, with funds under administration climbing $5.3 billion. The big four banks were all at least slightly in the green, with CBA up 0.3 per cent, ANZ up 0.4 per cent and NAB and Westpac posting very marginal gains. In the heavyweight financial sector, BHP was down 0.7 per cent, Fortescue had dropped 1.0 per cent and Rio Tinto had fallen 0.9 per cent. The Australian dollar was buying 65.55 US cents, from 65.59 US cents at the close of business on Monday.
Straits Times
6 days ago
- Business
- Straits Times
Australia's consumer sentiment edges up despite central bank rate shock: Survey
Find out what's new on ST website and app. Sentiment advanced by 0.6 per cent to 93.1 points, a Westpac Banking survey showed July 15. Australia's consumer confidence edged higher in July as households' assessment of their financial position improved even after the Reserve Bank shocked markets by keeping interest rates unchanged. Sentiment advanced by 0.6 per cent to 93.1 points, a Westpac Banking survey showed July 15, meaning pessimists persist in outweighing optimists with a dividing line of 100. 'Australia's consumer sentiment recovery experienced another 'false start',' said Westpac's head of Australian macro forecasting Matthew Hassan. 'While the mood improved a touch for the month as a whole, responses over the survey week show a clear disappointment following the RBA's surprise move.' Households polled before the rate decision reported an index reading of 95.6 while those surveyed after it reported an index read of 92, Westpac said. The RBA has lowered borrowing costs twice in 2025 and wrong-footed investors a week ago when it kept the cash rate at a two-year low of 3.85 per cent, rather than cut. Governor Michele Bullock said the difference with the market was one of timing rather than direction, suggesting further easing is likely. Traders are currently pricing two more rate cuts in 2025 with a slight chance of a third. 'Assessments of family finances improved for the survey overall but showed a sharper pull-back following the RBA decision,' Westpac's Hassan said. 'Indeed, even with the RBA's July surprise, consumers have become slightly more confident that interest rates will continue to move lower over the next year.' Top stories Swipe. Select. Stay informed. Business 'Some cannot source outside China': S'pore firms' challenges and support needed amid US tariffs Multimedia From local to global: What made top news in Singapore over the last 180 years? World Trump arms Ukraine and threatens sanctions on countries that buy Russian oil Singapore Turning tragedy into advocacy: Woman finds new purpose after paralysis Opinion Sumiko at 61: Everything goes south when you age, changing your face from a triangle to a rectangle Sport World Aquatics C'ship women's 10km open water swimming event delayed by a day due to water quality Singapore HSA intensifies crackdown on vapes; young suspected Kpod peddlers nabbed in Bishan, Yishun Singapore Ex-cop charged after he allegedly went on MHA portal, unlawfully shared info with man In Australia, where consumption accounts for about half of the economy, households' attitudes toward purchases are closely monitored by policymakers. Other key data points: The family finances vs a year ago sub-index climbed 5 per cent The 'family finances next 12 months sub-index posted a milder 2.6 per cent gain to 101.4, nudging back into net positive The time to buy a major item sub-index declined 2.6 per cent to 97.6, partly unwinding last month's 7.5 per cent surge The Westpac–Melbourne Institute Unemployment Expectations Index rose 1.1 per cent to 128.7 in July – a higher reading means more consumers expect unemployment to increase over the year ahead Westpac noted that while consumers are not fearful of job losses, the reading is broadly consistent with a flat rather than firming labour market BLOOMBERG
Business Times
6 days ago
- Business
- Business Times
Australia's July consumer optimism restrained by rate surprise, survey shows
[SYDNEY] A measure of Australian consumer sentiment improved marginally in July, a survey showed on Tuesday, though optimism on the economy was tempered by a central bank decision to skip a cut in interest rates. A Westpac-Melbourne Institute survey showed its main index of consumer sentiment crept up 0.6 per cent in July, following an equally restrained 0.5 per cent increase in June. The index was 12.6 per cent higher than a year earlier at 93.1, but being below 100 that still meant pessimists outnumbered optimists. The Reserve Bank of Australia surprised markets last week by holding rates at 3.85 per cent, when many had looked for a further cut following easings in February and May. Matthew Hassan, Westpac's head of Australian macro-forecasting, noted those surveyed before the decision reported an index reading of 95.6,while those surveyed after produced a reading of just 92. 'The reaction checked what would probably have been a solid rise,' said Hassan. 'It still leaves the consumer mood stuck at 'cautiously pessimistic' levels overall.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up A separate weekly survey from ANZ found a similar souring in mood, as its index dropped 2.1 points to 86.5 led by concerns over the economic outlook. Likewise, the Westpac survey showed its index of the economic outlook for the next year nudged up 1.8 per cent, while that for five years fell 2.8 per cent. Family finances compared to a year ago did enjoy a bounce of 5.0 per cent, while the outlook for the next 12 months picked up by 2.6 per cent. In a disappointing note for retailers, the index of whether it was a good time to buy a major household item dropped 2.6 per cent. REUTERS
