Technical Analysis

Australian data – Westpac Leading index for November -0.13% m/m (prior 0.02%)

Prior revised from -0.05% m/m to +0.02% m/m.


The six-month annualised growth rate in the Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, fell from -0.84% in October to -0.92% in November.

  • Growth rate falls to -0.92% from -0.84% in October.
  • Fourth consecutive month of negative growth rate.
  • Consistent with below trend growth well into 2023.
  • Drivers of weakness are the cash rate and commodity prices.

Westpac add their outlook for the Reserve Bank of Australia to the report, this is in summary:

  • We expect the Board will opt for a further 25bp increase at the February meeting given the outlook for wages; inflation and economic growth. We also expect that the wages and inflation challenges will persist through the early months of 2023 requiring further increases of 25bps in both March and May.

    The slowing economy; prospects of easing conditions in the labour market; lower inflation; and weak global growth will lay the foundation for an extended pause for the remainder of 2023.

The next items of interest for RBA policy are not until February, after the summer holiday:

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