Consumer confidence goes up a notch

• ANZ-Roy Morgan Australian Consumer Confidence was up marginally last week, gaining 0.6 per cent.

• Financial conditions subindices were mixed, with current finances down 1.3 per cent and future finances up by 4.8 per cent. The recovery in future finances reversed much of last week’s 5.3 per cent drop.

• The economic conditions sub-indices were positive. Current economic conditions were up 0.9 per cent and future economic conditions gained 0.5 per cent.

• The ‘time to buy a household item’ partially retraced the previous week’s gain, falling 2.1 per cent. Four week moving average inflation expectations were stable at 4 per cent.

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ANZ’s Head of Australian Economics, David Plank, commented:

“Confidence has been hovering around the same level for the last few weeks. A softening in the tension on US-China trade deals may have supported sentiment.

Domestically, the numbers from the capex print were encouraging though they weren’t strong enough to offset some of the other indicators suggesting a soft GDP print for Q4.

There is a lot out this week, with the RBA statement and Q4 GDP report the most notable. There is some prospect Q4 GDP could be negative, which might be a blow to consumer sentiment in the week ahead.

The continued resilience in consumer confidence suggests the recent slowing in GDP growth has not yet impacted the labour market to a material extent. We think whether it does or not will be the key to the outlook and the stance of the RBA."

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