Australia: Pessimism? - Westpac

pessimism towards the Australian economy since the start of this year with global repricing of central bank outlooks playing a part, but markets are now pricing ~50% of an RBA cut this year.

Key Quotes

“Consumer sentiment evaporated to begin the year, having spent all 2018 in “optimistic” territory. Clearly an unsettling development for the RBA given their concerns around consumption outlook.”

“RBA first meets Feb 5th, to be followed by Lowe speech on 6th and then SOMP on 8th where surely growth forecasts to be revised down.”

“Near term, pessimism may be overdone, but AUD still sitting near middle of fair value range. Look to sell rallies above 0.7250 for a longer term decline.”