ANZ-Roy Morgan Consumer Confidence slips to 118.2

• Households’ views towards current financial conditions fell 1.0% last week, only partially offsetting the cumulative 3.5% rise over the previous two weeks. Views towards future conditions moved in the opposite direction, up 2.6% – to their highest point in eight weeks.
• Consumers’ continued to be less optimistic about current economic conditions – their assessment declined another 1.7% last week, on the back of a 2.7% fall in the previous week. Views towards future economic conditions also saw a modest decline (-0.3%), though this was following a 1.4% increase in the week prior.
• The ‘time to buy a household item’ subindex slipped 2.5% – its fourth consecutive weekly fall. Four week moving average inflation expectations were unchanged at 4.3%.

“Confidence fell modestly for the second straight week, though it remains elevated. The fall occurred despite an upbeat statement and forecasts from the RBA released during the week.

"Geopolitical issues may be weighing on sentiment. US-China trade tension was in the news again, supporting the view that they are unlikely to be resolved quickly. A sharp fall in the Turkish lira, and its associated impact on financial markets more generally, may also have impacted.

"Looking past external risks, overall domestic conditions are solid, though the consumer remains in the focus. On this front, the WPI print out on 15 August should provide further insight into the evolution of wage growth and consumption.”