The monthly consumer confidence data is here: Australia - Westpac Consumer Confidence Index (Dec): +3.6% m/m
It hit its highest in 4 years today. Quite the bounce after languishing for much of 2017.
Comments from Westpac on their Reserve Bank of Australia view after the data (bolding mine):
- The Reserve Bank Board next meets on February 6. As discussed above, markets and general commentary have cooled their fervour for rate hikes in 2018. In turn that has helped boost Consumer Sentiment along with other factors discussed above.
- However we doubt whether this welcome lift to confidence will be sufficient to see the Bank achieve its ambitious growth forecast in 2018 of 3.25%. Constraints around incomes; savings; and debt are still likely to keep consumer spending growth below trend.
- The Bank's forecasts for core inflation (1.75% in 2018) and the cooling in the Sydney property market (which is once again apparent in this survey) are also likely to be significant headwinds to higher interest rates.
- We confirm our view that the cash rate is likely to remain on hold at 1.5% through 2018.
