The latest Westpac Melbourne Institute consumer sentiment survey shows a small decline to 102.2 from May’s reading of 103.2. Any reading above 100 indicates the number of consumers who are optimistic is more than the number of consumers who are pessimistic. The fall was partly driven by consumer’s views of economic conditions over the next year and over the next five years.
Westpac’s chief economist Bill Evans said it is common for consumer confidence to slip back a touch the month after an interest rate cut and the resultant surge in confidence. “Coming after an 8.5% surge in May, the small decline in June mostly represents a consolidation at improved levels.” He also singled out the “family finances” component, which he believes the RBA pays particular attention to as an indicator of demand, noting the 4.3% increase over the last month
Westpac is currently expecting the June quarter CPI figures to provide the RBA with the ammunition required to cut the official rate to 1.50% in August. Australian 10 year bond futures finished the day at 97.9175, implying a yield of 2.0825%.
