Australian consumer sentiment rebounded strongly in February, largely reversing all of the weakness seen in January.
However, when you look beneath the hood of the February survey, it’s clear that the vast majority of improvement was driven by just one group of households: those with a mortgage.
Take a look at the detailed table on changes in sentiment in the latest Westpac-MI survey.
Sentiment rose strongly among those servicing a mortgage, but not in other household groups.
Westpac put the sharp divergence down to an admission from the RBA last week that risks for the next move in Australia’s cash rate are now more “evenly balanced,” rather than “likely to be higher” as the bank though late last year.
However, with most of the news headlines now focusing about the prospect of a rate cut — something markets are now fully priced for by the end of this year — the bounce in sentiment among mortgage holders suggests they too are hanging out for a rate cut.