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    Westpac consumer confidence in Australia rises to -1.7%, up from -9% before

    by VT Markets
    /
    Jan 13, 2026
    Australia’s Westpac Consumer Confidence improved in January, rising to -1.7% from -9%. This change shows that consumers are feeling a bit better compared to the previous month. This rise may point to a more positive outlook on finances and the economy. While confidence is still negative, the smaller decline suggests Australians are less pessimistic at this time.

    Market Surprise

    This significant jump in consumer confidence, from -9% to -1.7%, surprises the market. It challenges the belief that consumers are weakening and that the Reserve Bank of Australia (RBA) will soon cut rates. We now need to consider that the economic outlook might be stronger than we thought. This data forces us to rethink the RBA’s strategy, especially since inflation remained stubborn at 3.8% in the last quarter of 2025. A strong consumer base could keep inflation high, leading the central bank to stay cautious longer than expected. We should consider buying put options on Australian 10-year government bond futures (XT) to prepare for higher yields. A more aggressive RBA outlook supports the Australian dollar. The AUD/USD pair, stuck in a range for weeks, may experience significant upward pressure as markets rethink rate cut expectations. In the upcoming weeks, buying AUD/USD call options or futures contracts could be a great way to take advantage of this change in sentiment.

    ASX 200 Implications

    The implications for the ASX 200 are more complicated. While better consumer confidence is good for retail and discretionary sectors, the risk of higher interest rates for a longer period might limit overall index gains, much like what we saw in early 2025. The increased uncertainty could raise market volatility, making a long straddle on the XJO index an appealing strategy to profit from large price movements in either direction. Create your live VT Markets account and start trading now.

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