Australian Consumer Sentiment Falls Sharply in October Following RBA Hike

• Australian consumer confidence fell 4.7% to 80.4 in October.
• RBA’s September 29 rate hike and rising fuel prices were primary drivers.
• Westpac anticipates another RBA rate increase in November despite weak sentiment.
• AUD/NZD declined, trading just above 1.2400.

Australian consumer confidence saw a significant decline in October, falling 4.7% to an index level of 80.4. This sharp drop was largely driven by the Reserve Bank of Australia’s (RBA) interest rate hike on September 29, with sentiment among those surveyed after the decision plunging to 67.2 from 86.9 beforehand, a level previously associated with the early-1990s recession. Rising fuel prices also contributed to the negative sentiment, leading to increased household unease regarding the jobs outlook. Despite this slump, Westpac, which conducts the survey, anticipates another RBA rate increase in November, suggesting the central bank’s focus remains on inflation risks over demand weakness. In currency markets, AUD/NZD traded just above 1.2400, marking its first down day after a three-session advance. The confluence of a tightening central bank and “recession-level” household gloom raises concerns for a potential sharper slowdown in consumer spending.