Daily Commentary BY THE CURVE TEAM –

Consumer Confidence Plunges as Containment Measures Ramp Up

25th of March, 2020

As the spread of the Covid-19 virus continues through the metropolitan centres of Australia, the Prime Minister announced further containment measures overnight.

The measures, all aimed at limiting forms of non-essential gathering of people, will clearly have further negative impacts on the economy. Whilst retail stores and food outlets can still operate, albeit under the social distancing conditions, it appears now just a matter of time until these parts of the economy will soon close. The effect on consumer confidence is already evident with a dramatic fall in yesterdays ANZ Roy Morgan Survey.

The impact on GDP from the measures will undoubtably be significant as the ability of consumers to go out and spend is reduced. Interestingly, the other major component of GDP in government spending saw no new announcements last night. There was a suggestion in the next 48 hours further support may be introduced specifically for renters, both commercial and residential, but that remains to be seen.

Offshore, despite further spreading within continental United States, positive developments with the passage of stimulus measure saw US equities have one of the largest one day gains in recent memory. With volatility and volumes in markets remaining at extreme, highs and lows respectively, these large swings in both directions may persist for some time to come

Matthew Dunshea

Client Relationship Manager