Australian Growth Rate Less Than Expected as Housing Bites

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    Australian third quarter GDP was reported at +0.3%…



    Moody’s Note on Australia saying outlook for infrastructure sector is stable next year issued after GDP misses.

    Super Harley

    Goldman Note on Australian Dollar – calls up to 75 in 3 months

    AUD/USD has had a round trip since the G20 meeting last weekend, initially rallying on the US-China ‘truce’ before falling on weaker GDP data and perceived dovishness from the RBA Deputy Governor Debelle.

    In our view, Deputy Governor Debelle’s comment that although the next move is likely a hike “there is still scope for further reductions in the policy rate” should be taken in the context of a speech dedicated to the policy response to the 2008 financial crisis rather than a signal on future policy direction.
    Further, at least some of the weakness in the GDP accounts should prove temporary and growth for 2019 should remain above trend.

    With a partial cut now priced into the curve, we think the risk-reward is favorable for AUD higher on a stabilization of both China data and CNY

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