Australia: National account to be game changer? - Westpac

According to Sean Callow, Research Analyst at Westpac, Australia’s national accounts can be game-changers for financial markets, with Q3 GDP reported to have risen just 0.3%qtr versus 0.6% consensus as deepening the disappointment were downward revisions, leaving y/y growth at 2.8%.

Key Quotes

“The 3.4% y/y in Q2 is now 3.1%. The details weren’t encouraging either. As the chart shows, business investment fell and consumer spending was weak, rising just 0.3%qtr, for a 0.15ppt contribution.”

“Even as the RBA on Tuesday declared that the “Australian economy is performing well,” it repeated its longstanding concern over the outlook for household consumption, so the poor Q3 reading will not be welcome. But, Q4 17 and Q2 18 were reportedly strong quarters for the consumer, so we could see either a rebound in Q4 or upward revisions.”

“This has seen AUD as weakest G10 currency over the week, unwinding the Powell-driven bounce. Yet the Fed outlook might help limit losses on AUD/USD near term. It seems that after a still-likely rate rise this month, 2019 is wide open to debate.”