Earlier today we got consumer sentiment data from Westpac:

Australia - Westpac's consumer confidence index (October): +1.1% m/m (prior +0.3%)

More now from the report, this time Westpac's chief economist Evans on the Reserve Bank of Australia's November meeting (bolding is mine for emphasis):

  • A significant number of commentators have been predicting a rate cut in November and a few weeks ago markets had been giving around a 50% probability to a move.
  • We were never convinced that the inflation report which is due to be released on October 26 would provide the case for a cut. In fact, with a 0.3% reading for the underlying inflation dropping out, it seems likely that the September quarter report will actually show that annual underlying inflation has lifted.
  • It has also become clear that the new Governor will give considerable weighting to 'financial stability' in his policy deliberations. With Sydney house prices having been reported to have lifted by 3.5% and Melbourne by 5% in the last three months the risks of further boosting housing with another rate cut will be a significant consideration for the Board.
  • While the results of today's report point to some short term deterioration in housing sentiment the longer term picture is clearly still positive. Indeed while we give little probability to a further rate cut at the next meeting our assessment of the growth outlook, including the shape of the construction cycle, points to rates remaining on hold for the foreseeable future.