The Commonwealth Bank Household Spending Intentions (HSI) series data to end October 2020 shows mixed results, as the effects of the Victorian shutdown lingered. It is pleasing to see a pick-up in Entertainment spending intentions, while Home buying, Retail and Travel spending intentions track sideways. Some weakness was evident in Health & fitness, Education and Motor vehicle spending intentions. Notwithstanding this mixed result, other data points to an improvement in the Australian economy in the early stages of November. Spending on CBA credit/debit cards has picked up as the Victorian economy opens up. In addition, low interest rates are encouraging an increase in home loan applications, especially for fixed rate mortgages by owner-occupiers. A stronger housing market should support spending intentions in the months ahead – as should the recent significant easing of monetary policy by the Reserve Bank of Australia.
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