Australia Westpac-MI leading index dropped eased from 2.86% to 1.47% in May. That’s the six-month annualized growth rate , which indicates the likely pace of economic activity relative to trend, three to nine months into the future. The index has moderated form just under 5% six months ago.
Westpac said that given the “improved pulse” of economic data as signalled by the leading index, “it seems unlikely that the Board would expect to have to wait until 2025 before it achieves the objectives necessary to justify the first cash rate increase since November 2010.” Also, it expects RBA to not extend the yield curve target from April 2024. RBA would decide to maintain the policy of AUD 5B of asset purchases per week, without setting a final target, to allow maximum flexibility.
