Sentiment improves but RBA rate cut prospects remain dim, says ANZ
Australian consumer confidence increased 2.7 points last week to 68.8 points, according to the latest ANZ-Roy Morgan Consumer Confidence index, reaching its highest reading since early March.
The four-week moving average rose 0.4 points to 66.4 points.
Across the index's sub-components, 'current financial conditions' gained 3.2 points over the period, while 'future financial conditions' rose 2.2 points. 'Short-term economic confidence' jumped 4.6 points and 'medium-term economic confidence' edged up 0.4 points. The 'time to buy a major household item' subindex added 3.1 points.
Weekly inflation expectations eased 0.2 percentage points to 5.9%, their lowest point since the survey week ending 1 March — the last period that largely preceded the escalation of conflict in the Middle East. The four-week moving average for inflation expectations also fell 0.2 percentage points to 6.1%.
"ANZ-Roy Morgan Australian Consumer Confidence rose to its highest level since early March," said ANZ economist Sophia Angala (pictured right). "However, confidence remains 17.5 points below the 2025 average.
"Recent momentum in consumer demand has been soft, and the weak level of consumer confidence supports our view that the RBA cash rate is likely to remain at 4.35% over the near term.
"Weekly inflation expectations also declined to their lowest level since early March - the last survey period which mostly occurred prior to the escalation in Middle East conflict. The pullback in inflation expectations likely reflects recent monthly inflation data, which was softer than expected."
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