Australia Westpac leading index rose slightly to -4.37% in July, up from -4.43%. The six-month annualized growth rate, remained in deep negative territory, consistent with recession. Nevertheless, a bottom was likely already reached in April’s -5.61%, while Q2 was already marked the low point in the growth cycle.
Overall, Westpac expected growth in Q3 to be flat. Victorian economy is expected to contract by -9% due to lockdown, which will offset the recovery in other states. It expects economy to grow 2.8% in Q4, on the assumption that Victoria moves through stage 4 to stage 2 restrictions, while other states could avoid second wave of coronavirus infections.
Westpac expects RBA to keep monetary policies unchanged on September 1. The next major event will be the Commonwealth Budget on October 6.
