Consumer confidence has increased only marginally but it is still around the long-term average according to the latest consumer survey. The September Westpac Melbourne Institute consumer sentiment survey shows a rise from August’s reading of 100.0 to 101.4. Any reading above 100 indicates the number of consumers who are optimistic is more than the number of consumers who are pessimistic.
The RBA’s August rate cut and the mortgage rate reductions which followed are now water under the bridge, although Australians generally think the unemployment rate will fall and family finances are better than a year ago. However, these are at odds with an increase in the number of people who think family finances and economic conditions in general will deteriorate over the next twelve months.
Westpac’s chief economist Bill Evans described the readings as “remarkably stable…despite significant events that can usually be expected to impact confidence”. He does not expect any more rate cuts this year unless October’s inflation report contains unexpectedly low numbers.
The 3 year bond yield rose 1bp to 1.62% and the 10 year bond rate was up 3bps to 2.12%. The AUD rose marginally against the USD but fell against the euro and the yen.