ANZ Roy Morgan Consumer Confidence Stays Below 70 For Fourth Week Ahead Of Inflation Data

ANZ Roy Morgan Consumer Confidence Stays Below 70 For Fourth Week Ahead Of Inflation Data
27 October 2026 | Economy | Falkon Analytics Market Observations

MARKET OVERVIEW
ASX 200 closed slightly higher at 8837.40 on 27 October 2026, up 27.5 points or 0.31 percent after intraday low of 8773.40. Financials main drag with Bank of Queensland down 3.1 percent to $6.83, Zip Co up 5.9 percent to $1.72 after 50 percent flash crash Friday. Commonwealth Bank, NAB, Westpac, ANZ down 0.5 to 1 percent ahead of inflation data 28 Oct and RBA decision 4 Nov.

ANZ-Roy Morgan consumer confidence at 67.9, fourth consecutive week below 70, down 17.9 points year on year. Weekly inflation expectations at 6.3 percent, down 0.2 points on week but still elevated versus RBA target 2 to 3 percent. 52 percent of respondents say they are worse off financially than a year ago, 16 percent better off. Time to buy major household item index down 6.3 points to 22.1, with 48 percent saying bad time to buy.

CONSUMER CONFIDENCE BREAKDOWN
For educational purposes, ANZ-Roy Morgan survey covers five sub-indices:

1. Personal Financial Situation vs Year Ago: Around 22 percent positive, 52 percent negative, net -30. This is lowest since March 2023.
2. Personal Financial Situation Next 12 Months: 28 percent expect better, 32 percent worse, net -4, indicating near-term caution.
3. Economic Conditions Next 12 Months: 18 percent expect good times, 45 percent bad times, net -27, reflecting rate and cost of living concerns.
4. Economic Conditions Next 5 Years: 22 percent good, 38 percent bad, net -16.
5. Time to Buy Major Household Item: Index at 22.1, down 6.3 points week on week, 48 percent bad time, 22 percent good time. This correlates with retail sales of electronics and furniture.

INFLATION AND RBA CONTEXT
ANZ expects trimmed mean inflation at 1.0 percent for September quarter, annual trimmed mean around 3.6 percent, headline around 3.8 percent. If outcome at 1.0 percent, market pricing suggests RBA could lift cash rate from 4.35 percent to 4.85 percent in November to curb services inflation.

Key drivers: Rents up 7.2 percent year on year, insurance up 14 percent, electricity up 12 percent after rebates rolled off, fuel $1.95 per litre up from $1.78 in June. Services inflation around 4.5 percent, goods around 2.1 percent.

Banks CET1 ratios: CBA 12.8 percent, NAB 12.1 percent, Westpac 12.3 percent, ANZ 12.5 percent. Net interest margins: CBA 1.98 percent, NAB 1.71 percent, Westpac 1.86 percent, ANZ 1.63 percent. Cost to income: CBA 43.2 percent, NAB 45 percent, Westpac 50 percent, ANZ 52 percent. Provision coverage 1.45 percent, 90-day arrears 0.85 percent up from 0.62 percent a year ago. Funding costs BBSW 4.35 percent 90-day, 3-year swap 4.1 percent.

ASX IMPACT AND SECTOR ROTATION
When confidence stays below 70 for four weeks, historical observations show consumer discretionary like Harvey Norman, JB Hi-Fi, Universal Store typically see like-for-like sales down 2 to 5 percent, while staples like Woolworths $48b sales margin 5.8 percent and Coles $38b margin 4.9 percent hold better.

On 27 Oct, materials bounced: BHP up 2.3 percent to $56.93, Rio up 1.6 percent to $148.92, South32 up 1.8 percent, Sandfire up 2.1 percent to $19.58, Lynas up 1.2 percent, Liontown up 4.3 percent, Genesis Minerals up 4.2 percent, Paladin Energy up 2.4 percent. PBOC record injection 1.01 trillion yuan and China 5-year yield at record low 1.34 percent supports industrial demand.

Global drivers: Anthropic IPO filing revived AI trade lifting engineering contractors Southern Cross Electrical 7.8 percent to $3.82, Tasmea 5.8 percent to $9.18, Maas Group 5.4 percent, SKS Technologies 5.1 percent, GR Engineering 4.4 percent, GenusPlus 2.4 percent. Megaport up 5.9 percent to $16.99, NextDC up 3.6 percent to $5.74. High-grade AI related funding topped $300b in 2026 triple 2025 per BlackRock Rick Rieder short-dated single A portfolios yield 7 percent.

WHAT TO WATCH NEXT

• CPI 28 October 2026: Trimmed mean quarterly outcome, annual headline and trimmed.
• RBA Decision 4 November: Cash rate path 4.35 percent to 4.85 percent potential, impact on mortgage rates currently around 6.5 percent variable.
• Retail Sales and Consumer Stocks: Universal Store DTC up 9.3 percent 17 weeks to 25 Oct, Perfect Stranger up 36.8 percent LFL up 11.6 percent cycling 13.9 percent gross margin benefiting AUD USD stronger offsetting transport costs.