The ANZ-Roy Morgan index made a strong recovery last week, rising 2.8 per cent after the prior week’s 1.1 per cent drop.
Financial conditions were positive, with current finances up 1.6 per cent, while future finances rose for the fourth consecutive week in gaining 2.6 per cent.
Economic conditions finally recovered with substantial gains compared to weak performance for the last few weeks. Current economic conditions gained 2.6 per cent, while future finances were up significantly by 6.8 per cent.
The rise in future economic conditions is pleasing, as this particular sub-index has been in a downtrend for the last four weeks.
The ‘time to buy a household item’ also strengthened, increasing 1.3 per cent. The four-week moving average of inflation expectations declined by 0.1 percentage point to 4.0 per cent.
“Sentiment recovered last week, possibly in part on the back of the Reserve Bank of Australia Governor’s comments about a ‘gentle’ upturn in the economy,” ANZ Head of Australian Economics, David Plank, said.
“Reasonable CPI data and the lift in building approvals may have also contributed to the lift in sentiment. The jump in future economic conditions was notable, as this index has been acting as a major drag for the whole index.”
“Better global news, reflected in higher global share prices, likely also impacted. The weekly inflation expectations subindex remained at its recent low and the RBA is likely to be pay some attention to that.”
