2019.11.2003:20:00UTC+00Australia's Leading Index Signals Weak Economic Momentum

Australia's leading index rose moderately in October but it remained below trend suggesting weak economic momentum carrying well into 2020, the Westpac reported Wednesday.

The six-month annualized growth rate in the Westpac- Melbourne Institute leading index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, increased to -0.91 percent in October from -1.01 percent in September.

Nonetheless, the leading index growth rate deteriorated over the last six months to -0.91 percent in October from -0.53 percent in May.

The main components driving the 0.39 percentage point shift were a sell-off in commodity prices, a more mixed performance on the Australian share market, a deterioration in consumers' unemployment expectations, in consumer expectations more generally and a slowdown in monthly hours worked.

Westpac expects the Reserve Bank of Australia to hold the cash rate steady at its next meeting on December 3.