Westpac Consumer Sentiment at the lowest level since December

Wednesday, Jul 15 2015

A measure of Australian consumer sentiment fell for a second straight month in July with households seemingly spooked by gloomy media coverage of events in China and Greece, underlying how volatile the mood has become.The survey of 1,200 people by the Melbourne Institute and Westpac Bank showed its index of consumer sentiment fell a seasonally adjusted 3.2 percent in July, from June.

The index reading of 92.2 was 2.8 percent lower than in June 2014 and the weakest since December. The drop has more than wiped out the May bounce that followed a cut in interest rates to record lows and a government budget that included a surprise tax break for small businesses.

Westpac chief economist, Bill Evans, attributed the latest decline to economic instability in Europe and "sensational coverage" of the recent slump in Chinese shares. With shares in China now having steadied and progress made on a debt deal for Greece, it was likely that sentiment could bounce back in coming weeks, said Evans.

Separate report on New Motor Vehicle Sales showed that in June 2015 seasonally adjusted estimate (97 620) has increased by 3.8% when compared with May 2015. When comparing seasonally adjusted estimates for June 2015 with May 2015, all vehicle types recorded an increase in sales. Sales for Passenger and Sports utility vehicles increased by 5.4% and 3.3% respectively while Other vehicles increased by 1.1%.

Data did not have any major impact on the markets with Aussie currently being traded around 0.7470 level. Pair is likely to find support around 0.74 handle and resistance above 0.75 handle. Later today, in the US session PPI, Empire State Manufacturing Index and Industrial Production figures are scheduled for a release.

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