Depressed Westpac confidence index hints at further RBA cuts
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AUD/USD
FXstreet.com (Barcelona) - The Westpac Business survey printed a terrible number today, after a surprise 4.1% fall. The print follows a poor NAB confidence number yesterday too. For now though, the AUDUSD has turned a deaf ear to the news as it continues to trade admirably firm around 1.0535.
According to Westpac Chief Economist Bill Evans: "This is a very surprising result. When we saw the 5.2% increase in the Index in November, which came despite the Reserve Bank surprising by holding rates steady, it appeared that sentiment was finally starting to respond to the accumulated series of rate cuts since November last year."
Greg Mc Kenna, founder at GlobalFX, believes that the results help to anticipate challenging times for both the Australian retail sector and the Australian economy for 2013.
Mr. McKenna notes: "In sitting below the level of November 2011 when the RBA started to cut rates and given the size of the cumulative rate cuts and the fact that cash rates are at 3% this fact alone says there is much weight and worry still on Australian consumers and our long held thoughts that rates would go to 2.5% may end up being optimistic."
Westpac's Bill Evans adds: " Evidence to date is that low rates are not generating much traction with households, Hence there is likely to be a decision to further ease rates in February or March..."
Greg's final remarks: "It's austerity Australian style folks - it's not something we revel in and it's not something that we can trade in currency markets YET but it is something that can and does trade in interest rate futures, bond and swap markets."
According to Westpac Chief Economist Bill Evans: "This is a very surprising result. When we saw the 5.2% increase in the Index in November, which came despite the Reserve Bank surprising by holding rates steady, it appeared that sentiment was finally starting to respond to the accumulated series of rate cuts since November last year."
Greg Mc Kenna, founder at GlobalFX, believes that the results help to anticipate challenging times for both the Australian retail sector and the Australian economy for 2013.
Mr. McKenna notes: "In sitting below the level of November 2011 when the RBA started to cut rates and given the size of the cumulative rate cuts and the fact that cash rates are at 3% this fact alone says there is much weight and worry still on Australian consumers and our long held thoughts that rates would go to 2.5% may end up being optimistic."
Westpac's Bill Evans adds: " Evidence to date is that low rates are not generating much traction with households, Hence there is likely to be a decision to further ease rates in February or March..."
Greg's final remarks: "It's austerity Australian style folks - it's not something we revel in and it's not something that we can trade in currency markets YET but it is something that can and does trade in interest rate futures, bond and swap markets."
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