Australian consumer confidence drops on falls in sentiment toward financial, economic conditions outlook - ANZ

The ANZ-Roy Morgan Australian consumer confidence dropped 0.9 percent in the week ended 12 February to 116.4. This is the second consecutive decline in the sentiment. The fall was mostly because of declines in sentiment toward financial and economic conditions in the coming 12 months. Households’ views of current finances rebounded 1 percent, whereas confidence towards future finances dropped 1.8 percent. Both indicators continued to be above their long run averages.

Consumers’ views about economic conditions in the next 12 months dropped 3.8 percent, partly unwinding the 5.7 percent rebound in the earlier two weeks. Confidence about economic conditions over the next five years dropped 0.7 percent in the week following a strong 4.7 percent rise in the prior week. The ‘good time to buy a household item’ sub-index remained flat at 0.1 percent.

ANZ’s head of Australian economics David Plank stated that the drop in the financial and economic outlooks in the next 12 months might show the current global policy uncertainty and also the downward revisions to growth in last week’s Statement on Monetary Policy.

“Overall, however, confidence remains above trend and is likely to remain elevated in the longer term in our view, supported by solid economic fundamentals and accommodative monetary conditions. Importantly, confidence in current finances appears to have stabilised”, added David Plank.

Thursday’s labor force report has the potential to affect sentiment in the near term. A strong increase in employment is expected given the strength in business conditions and leading employment indicators, stated David Plank.

At 5:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar highly bullish at 104.195, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -53.2337. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex