Latest news with #MatthewHassan
Perth Now
19 hours ago
- Business
- Perth Now
Surprising group feeling good about rate cut
A surprising group of Australians are feeling better about their personal finances and the broader economy after the Reserve Bank's August rate cut gave households a much-needed confidence boost. The latest Westpac-Melbourne Institute survey showed consumer sentiment jumped 5.7 per cent to 98.5 in August. This was its highest level in nearly four years. A score of 100 or better suggests Australians are optimistic about the future. But the soaring consumer sentiment is not coming from the group of people you would expect to benefit from lower rates. Australians are feeling better on the back of interest rate cuts. NewsWire/ Monique Harmer Credit: News Corp Australia Westpac head of Australian macro-forecasting Matthew Hassan said overall consumers were feeling better about cost of living. 'Interestingly, the gains are not confined to or even being led by the mortgage belt, the section of consumers that stand to benefit most directly from lower interest rates,' he said. 'Some of the strongest improvements in the August month were among renters, suggesting that easing cost-of-living pressures – including slower growth in rents – has also been a positive.' Mr Hassan said the sharp pick up in consumer sentiment came just days after the RBA lowered the official cash rate by 25 basis points to 3.60 per cent. 'The RBA's forecasts also imply that rates will likely need to be a little lower to keep the economy on track, a point the RBA governor highlighted in the post-decision press conference' he said. 'That looks to have reinforced consumer expectations that mortgage interest rates are headed lower, giving a broadbased boost to sentiment.' Australia's Cash Rate 2022 It was the third interest rate cut of the cycle, with cash-strapped mortgage holders getting 75 basis points of rate relief since February. Consumer sentiment first ticked up after the income tax cuts in the middle of last year and steadily rose on the back of each RBA rate cut. Although there was a pause in sentiment in April when Australians feared the worst when US President Donald Trump announced his tariff policy The rise was broadbased, with all five measures Westpac-Melbourne Institute lifted over the month. The biggest lift was consumers feeling about their personal finances. The 'family finances vs. a year ago' sub-index surged 6.2 per cent in August to 84.2, still a pessimistic read but only marginally below the long-run average of 88, while expectations about the 'family finances over the next 12 months' are up 5.4 per cent to 106.8. Australians are also starting to feel optimistic about making big purchases. Australians now say it's a good time to buy a big-ticket item. NewsWire / John Appleyard Credit: News Corp Australia The 'time to buy a major item' sub-index jumped to optimistic in the month of August as crossing the 100 mark. The RBA rate cut gave a substantial boost to housing-related sentiment. The 'time to buy a dwelling' index jumped 10.5 per cent to 97.8, a new four-year high and up 37 per cent on a year ago, albeit still well below the historic rate of 120. Mr Hassan said the long run of consumer pessimism may finally be coming to an end, although he pointed out households should not expect back-to-back rate cuts. 'Further easing will likely be needed to sustain gains,' he said. However, he said the RBA did not need to rush to cut rates further. 'Inflation is inside the RBA's target range and likely to stay there but the unemployment rate is still low by historical standards,' he said. 'We expect the board to take things meeting by meeting and respond to the flow of data as it comes in.' The RBA monetary policy board next meets on September 29-30.
Sky News AU
15-07-2025
- Business
- Sky News AU
Reserve Bank of Australia's shock rate hold dampens the mood for Aussie shoppers, per Westpac's Consumer Sentiment Index
Consumer confidence jumped in July but was hurt by the Reserve Bank of Australia's shock rate hold that denied millions of Australians much-needed mortgage relief. The latest Consumer Sentiment Index from Westpac and the Melbourne Institute ticked up 0.6 per cent to 93.1 per cent in July. Based on a survey conducted from July 7 to 11, respondents reported an index read of 95.6 before the RBA held rates. This dived to 92 after the central bank held the cash rate. Westpac's head of Australian macro-forecasting Matthew Hassan said the reaction minimised what 'would probably have been a solid rise'. 'This is the third time since late last year that events have conspired to undermine promising improvements in the consumer mood,' Mr Hassan said in the report. 'Daily responses showed similar patterns in April (following the 'Liberation Day' tariff announcements) and back in November (when a milder RBA disappointment combined with a surprise US Presidential election result).' The consumer sentiment index tracks family finances, expectations for the economy and whether Aussies believe now is a good time to buy a major household item. Australians remain 'cautiously pessimistic' about the nation's economy as the index remains below positive territory (above 100). The recent result, however, is still greatly above the consumer sentiment index scores of 82.7 in July 2024 and 81.3 in July 2023. AMP economist My Bui said the weight of post-pandemic inflation had weighed on household budgets and hurt consumer confidence. 'The main reason for why consumer sentiment has been negative for so long (more than three years, the most outside of recessions) is because of very sluggish readings in family finances since the end of 2020,' Ms Bui said in a statement. 'Unsurprisingly, wage earners are still worse off than 2020 given that the rise in price levels (+20 per cent) has outpaced wages growth (+15 per cent).' Credit reporting agency CreditorWatch pointed to Donald Trump's trade war for the lower than expected consumer confidence increase. 'Tariff related uncertainties about the longer-term outlook for the economy are also restraining confidence somewhat, though even abstracting from this effect, consumers would still be slightly net pessimistic about the economy,' it said. The Reserve Bank of Australia earlier this month held the cash rate at 3.85 per cent, subverting widespread expectations it would cut rates by 25 basis points. This would have been the first consecutive rate cut since early 2020 and the third cut this year. Whether the RBA cuts rates at its next meeting in August depends on what the trimmed mean inflation figure for the June quarter is. RBA governor Michele Bullock said the shock hold was about 'timing' as the central bank needed more concrete information about how inflation was continuing to decline.
West Australian
15-07-2025
- Business
- West Australian
RBA's hold keeps consumer sentiment recovery in check
Last week's move by the Reserve Bank to hold fire on a third interest rate cut for 2025 has failed to dampen the spirits of Australian consumers. But the shock decision that blindsided most market watchers did keep a lid on what would have been a solid gain in the monthly consumer sentiment index measured by big four bank Westpac and the Melbourne Institute. The index data, released on Tuesday, showed the recovery in consumer sentiment experienced another 'false start' in July — rising just 0.6 per cent to 93.1 — up from June's reading of 92.6. Westpac head of Australian macro-forecasting Matthew Hassan said responses over the survey week showed a clear disappointment following the RBA's move to leave the official cash rate on hold a 3.85 per cent — despite analysts saying ahead of the two-day meeting that a 25 basis-point cut was a near certainty. Mr Hassan said those surveyed before the decision reported an index read of 95.6 while those surveyed after reported it had dropped to 92. 'The reaction checked what would probably have been a solid rise,' he said. 'This is the third time since late last year that events have conspired to undermine promising improvements in the consumer mood. 'Daily responses showed similar patterns in April (following the Liberation Day tariff announcements) and back in November (when a milder RBA disappointment combined with a surprise US Presidential election result). 'The latest check to sentiment is less dramatic but it still leaves the consumer mood stuck at 'cautiously pessimistic' levels overall.' RBA governor Michele Bullock said last week the board would 'wait for a little more information' to be certain it had beaten inflation. The Westpac-Melbourne Institute survey found family finances improved for July but showed a sharper pull-back following the rates call. A family's current perception of their finances compared to a year ago posted a solid 5 per cent rise overall to 79.2. A family's confidence in their finances for the next 12 months posted a milder 2.6 per cent gain to 101.4, nudging back into net positive territory as households bank on signals from the RBA that more rate relief would be on the way when the time is right. The index's 'time to buy a major item' reading dropped 2.6 per cent to 97.6, partly unwinding last month's promising 7.5 per cent surge and dipping back into slight negative territory. 'The decision on interest rates may have tipped some consumers towards holding off on major purchases,' Mr Hassan said. But there were positive signs for Australia's overall economic fortunes over the next 12 months, with the index's outlook measure jumping 1.8 per cent to 94.1. Looking five years ahead, the measure rose 2.8 per cent to 93.4. 'Both sub-indexes are still marginally above historical averages but have struggled to sustain gains since the start of the year,' Mr Hassan said. 'Tariff-related uncertainty about the global economic backdrop continues to weigh particularly heavily on five-year views on the economy with this sub-index down nearly 8 per cent compared with March. 'Consumers are not overly concerned about the economy but appear unsure about which direction its heading in. '
Perth Now
15-07-2025
- Business
- Perth Now
Australian shares gain as consumers' mood lifts
The local share market has moved higher as a long-running survey of Australian consumer sentiment posted another modest gain despite last week's surprise move on interest rates. At noon on Tuesday, the benchmark S&P/ASX200 index was up 36.7 points, or 0.43 per cent, to 8,607.1, while the broader All Ordinaries had gained 36.9 points, or 0.42 per cent, to 8,852.2. The Westpac-Melbourne Institute Consumer Sentiment survey, based on a poll of 1,200 Australian adults conducted last week, showed a lift for a third straight month. "While the mood improved a touch for the month as a whole, responses over the survey week show a clear disappointment following the RBA's surprise move to leave rates on hold at its July meeting," said Westpac's head of Australian macro forecasting, Matthew Hassan. AMP economist My Bui said that compared to the longer-term trend, Australian consumer confidence remained soft and way below its long run average. In China, the National Bureau of Statistics reported that the world's second-biggest economy grew at 5.2 per cent in the June quarter, slightly better than consensus estimates of 5.1 per cent growth. Ten of the ASX's 11 sectors were in the green at midday, with materials flat. Tech was the biggest mover, rising 2.1 per cent. Life360 had gained 9.0 per cent to an all-time high of $35.55, Appen had climbed 5.6 per cent to $1.135 and Weebit Nano had advanced 6.4 per cent. Eftpos providers Tyro Payments and Smartpay Holdings were down 5.2 and 1.9 per cent, respectively, after the Reserve Bank proposed banning surcharging on debit and credit cards. Hub24 had advanced 5.5 per cent to an all-time high of $99.71 after the wealth management platform announced strong growth in the fourth quarter, with funds under administration climbing $5.3 billion. The big four banks were all at least slightly in the green, with CBA up 0.3 per cent, ANZ up 0.4 per cent and NAB and Westpac posting very marginal gains. In the heavyweight financial sector, BHP was down 0.7 per cent, Fortescue had dropped 1.0 per cent and Rio Tinto had fallen 0.9 per cent. The Australian dollar was buying 65.55 US cents, from 65.59 US cents at the close of business on Monday.
Straits Times
15-07-2025
- Business
- Straits Times
Australia's consumer sentiment edges up despite central bank rate shock: Survey
Find out what's new on ST website and app. Sentiment advanced by 0.6 per cent to 93.1 points, a Westpac Banking survey showed July 15. Australia's consumer confidence edged higher in July as households' assessment of their financial position improved even after the Reserve Bank shocked markets by keeping interest rates unchanged. Sentiment advanced by 0.6 per cent to 93.1 points, a Westpac Banking survey showed July 15, meaning pessimists persist in outweighing optimists with a dividing line of 100. 'Australia's consumer sentiment recovery experienced another 'false start',' said Westpac's head of Australian macro forecasting Matthew Hassan. 'While the mood improved a touch for the month as a whole, responses over the survey week show a clear disappointment following the RBA's surprise move.' Households polled before the rate decision reported an index reading of 95.6 while those surveyed after it reported an index read of 92, Westpac said. The RBA has lowered borrowing costs twice in 2025 and wrong-footed investors a week ago when it kept the cash rate at a two-year low of 3.85 per cent, rather than cut. Governor Michele Bullock said the difference with the market was one of timing rather than direction, suggesting further easing is likely. Traders are currently pricing two more rate cuts in 2025 with a slight chance of a third. 'Assessments of family finances improved for the survey overall but showed a sharper pull-back following the RBA decision,' Westpac's Hassan said. 'Indeed, even with the RBA's July surprise, consumers have become slightly more confident that interest rates will continue to move lower over the next year.' Top stories Swipe. Select. Stay informed. Business 'Some cannot source outside China': S'pore firms' challenges and support needed amid US tariffs Multimedia From local to global: What made top news in Singapore over the last 180 years? World Trump arms Ukraine and threatens sanctions on countries that buy Russian oil Singapore Turning tragedy into advocacy: Woman finds new purpose after paralysis Opinion Sumiko at 61: Everything goes south when you age, changing your face from a triangle to a rectangle Sport World Aquatics C'ship women's 10km open water swimming event delayed by a day due to water quality Singapore HSA intensifies crackdown on vapes; young suspected Kpod peddlers nabbed in Bishan, Yishun Singapore Ex-cop charged after he allegedly went on MHA portal, unlawfully shared info with man In Australia, where consumption accounts for about half of the economy, households' attitudes toward purchases are closely monitored by policymakers. Other key data points: The family finances vs a year ago sub-index climbed 5 per cent The 'family finances next 12 months sub-index posted a milder 2.6 per cent gain to 101.4, nudging back into net positive The time to buy a major item sub-index declined 2.6 per cent to 97.6, partly unwinding last month's 7.5 per cent surge The Westpac–Melbourne Institute Unemployment Expectations Index rose 1.1 per cent to 128.7 in July – a higher reading means more consumers expect unemployment to increase over the year ahead Westpac noted that while consumers are not fearful of job losses, the reading is broadly consistent with a flat rather than firming labour market BLOOMBERG
