Westpac Leading Index for May -0.12%
- prior was +0.1%
- The six month annualised deviation from trend growth rate in the Westpac-Melbourne Institute Leading Index , which indicates the likely pace of economic activity three to nine months in the future, declined from +0.19% in April to -0.02% in May
WPAC comments:
- Australian economy appears to have suffered a loss of momentum
- a concern given the recent reduction in interest rates
Nearly every component contributed to the decline:
- Consumer sentiment posted a large reversal
- The month also included negatives from US industrial production (-0.2%), commodity prices (-2.1% in AUD terms) and dwelling approvals (-4.4%). The S&P/ASX 200 dipped 0.2% in May with a very weak start to June (-4% month to date) suggesting sharemarket falls may become more of drag in coming months
The sole positive in the month was a widening yield spread (+0.58bps) courtesy of lower short term rates following the RBA's May cut and higher bond rates globally - the rate mix broadly indicative of more expansionary financial settings
