Update from wonderland :Rising interest rates dented consumer confidence in November, snapping five months of increases.
By Daniel at 11 November, 2009, 1:28 am
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The Westpac-Melbourne Institute consumer sentiment index dropped by 2.5 per cent in November to 118.3 reversing a 1.7 per cent rise in the previous month. The index had risen for five months to October, as the sharemarket recovered and interest rates remained low.
”Given that this fall comes after a second consecutive increase in the Reserve Bank’s overnight cash rate and associated increases in variable mortgage rates it has to be classified as a modest response,” said Westpac chief economist Bill Evans.
”With household debt levels now higher than in 2003, the 2.5 per cent fall in the index is probably signalling that sentiment will become progressively more sensitive to the sequence of future rate hikes that we expect through to mid next year,” he said..
The hike stinks and was only helpful for the (mainly GS)carry traders.
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