2 Mar 2016
AUD: GDP rose by 0.6% in Q4 – RBC CM
Elsa Lignos, Senior Currency Strategist at RBC Capital Markets, notes that the Australian GDP rose by 0.6% in Q4 (consensus 0.4%), with upward revisions to previous quarters taking the y/y rate to 3.0% from 2.7%.
Key Quotes
“Activity in the quarter was driven by household consumption (+0.8%), inventories (+0.2ppc), and public expenditure (+6%). However, our economists note that more timely data—business conditions and confidence, capex plans, wages, and employment—have lost momentum recently and coupled with a tightening in financial conditions will keep pressure on the RBA to ease further. They retain two 25bp rate cuts in their forecast for 2016.”
Key Quotes
“Activity in the quarter was driven by household consumption (+0.8%), inventories (+0.2ppc), and public expenditure (+6%). However, our economists note that more timely data—business conditions and confidence, capex plans, wages, and employment—have lost momentum recently and coupled with a tightening in financial conditions will keep pressure on the RBA to ease further. They retain two 25bp rate cuts in their forecast for 2016.”