Australia: Confidence is the name of the game - Westpac

According to Elliot Clarke, Research Analyst at Westpac, while the global markets have remained in a delicate balance this week, unsure of the next turn in the US/China trade saga and given growing geopolitical tensions, in Australia, the RBA sought to encourage optimism over the outlook.

Key Quotes

“For Australia, the most significant development this week was RBA Governor Lowe’s address in Perth, titled ‘Regional Variation in a National Economy’. His take-home point was simple: “over time the differences in the structure of output and employment across regions are tending to become smaller”. For much of the post-GFC period, Australia has suffered from a two (or more) speed economy, most evident after the end of the mining-investment boom when opportunities in WA and Qld lagged a long way behind the other states.”

“However, as highlighted by Governor Lowe, this disparity of opportunity looks to be dissipating.”

“Providing support for the RBA’s optimism over the outlook, Westpac–MI consumer sentiment held above the optimist/ pessimist divide in April, near its long-run average.”

“On business conditions, the exceedingly strong outcomes reported by the NAB business survey in January and February we were cautious of have now been reversed. That said, March was still a strong result, well above the long-run average.”

“Moving offshore, developments in the trade spat between the US and China have been positive this week.”