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Australia Westpac Melbourne Institute Consumer Sentiment Index witnessed a significant 9.4% increase in April, jumping from 78.4 in March to 85.8. This remarkable recovery can be largely attributed to RBA's decision to pause rate hikes during its April meeting, breaking a sequence of ten consecutive meetings with cash rate increases.
The RBA has delivered a pause in rate hikes not unsurprisingly, but most economists agree there will need to be one or more hikes down the track
The RBA Board has softened its clear tightening bias but not enough for Westpac to change its view that we can expect one final rate increase at the May Board meeting.
Softer updates around the Australian consumer and inflation have strengthened the case for a pause at next week’s April RBA policy meeting. Global market sentiment meanwhile improved over the week as concerns over US and European banks eased.
The Reserve Bank Board meets next week on April 4. We confirm the forecast we released on March 17 that the Board will decide to pause at the April meeting.