US Consumer Confidence drops, government reality weighing in

Fundamental Analysis

USD

"Consumer confidence is starting to reflect the realities of governing, not the hopes that the swamp will be drained."

- Joel Naroff, Naroff Economic Advisors

The Conference Board Consumer Confidence Index dropped more than experts estimated. In April, it lost 3.8% and reached 120.3, thus, marking the first decline since January. The fall was mainly attributable to the less optimistic view of business conditions and the labour market in the upcoming six months. As a result, the number of respondents, who evaluated business conditions as "good", decreased from 32.4% to 30.2% and the share of those, who assessed the available number of jobs in the market as "plentiful", plunged from 31.8% to 30.8%. In addition, the number of people who evaluated business conditions as "bad" increased slightly from 13.1% to 13.8%. Yet, the share of consumers that believed jobs were "hard to get" remained unchanged at 19.1%. The Conference Board's data confirmed the view that in the short-run consumers would likely to limit their spending and put more emphasis on savings accumulation. Tuesday's data also showed that the number of people, who thought that business conditions would worsen over the next six months, rose from 8.5% to 10.9%, while the share of those expecting weaker job creation surged from 12.7% to 13.1%. Nevertheless, the majority of respondents still believed that the economy would continue growing in the months ahead.

AUD

"We see a genuine recovery in core inflation as a quite distant prospect, which biases the RBA to ease again."

- Ben Jarman, JP Morgan

Australian consumer headline inflation growth missed forecasts in the three month to March, while core inflation rose in line with expectations, official figures revealed on Tuesday. The Australian Bureau of Statistics reported that its headline CPI came in at 0.5% in the Q1 of 2017, unchanged from the preceding quarter, while market analysts anticipated an increase of 0.6% during the reported quarter. On an annual basis, headline inflation climbed 2.1%, missing markets' expectations for a 2.2% rise. Nevertheless, the Trimmed Mean CPI, the ABS' core inflation measure, advanced 0.5% on a quarterly basis, in line with forecasts. Year-over-year, core inflation rose 1.9%, surpassing expectations for a 1.8% climb. Despite the rise in the core inflation rate, analysts stated that overall inflation was modest and driven by some temporary factors, such as the change in crude oil prices, forcing the Reserve Bank of Australia to remain on hold for an undefined period of time. Prices for education, health and transport climbed 3.1%, 2.0% and 1.5%, respectively. However, the following gains were offset by price declines in other categories. Prices for clothing and footwear dropped 1.4%, for furnishings, household equipment and services prices fell 1.0% and for recreation and culture prices plunged 0.7%.

Download The Full Daily Forex Fundamental Overview