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4 Jun 2014
Australian recovery remains solid - Societe Generale
FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale, underlined the solid momentum of the economic growth in Oz.
Key Quotes
"With the market mostly in 'waiting for tomorrow' mode I was reflecting yesterday that memories of whether trades were profitable or not matters to how markets behave, hence the observation that happiness is important. But before I get to that: Overnight's news saw strong services PMIs in Japan and India, weak figures in Russia and most importantly, strong GDP data in Australia."
"Australian GDP rose 1.1% q/q, and 3.5% y/y, though terms of trade deteriorated by 1.2%. Higher import prices perversely depressed the GDP deflator, and nominal GDP growth actually slowed from 1.6% q/q to 1.1% q/q."
"The AUD was left little changed as relative rates moved in its favour (5yr OZ/US spread +5bp after reaching a 5year low yesterday), counteracting the terms of trade deterioration. AUD/NZD has broken above its 200-day average at 1.0985, and looks set to rally a good bit further. That reinforces a view that NZD is a better sell than AUD, which will remain in its range for a while longer."
Key Quotes
"With the market mostly in 'waiting for tomorrow' mode I was reflecting yesterday that memories of whether trades were profitable or not matters to how markets behave, hence the observation that happiness is important. But before I get to that: Overnight's news saw strong services PMIs in Japan and India, weak figures in Russia and most importantly, strong GDP data in Australia."
"Australian GDP rose 1.1% q/q, and 3.5% y/y, though terms of trade deteriorated by 1.2%. Higher import prices perversely depressed the GDP deflator, and nominal GDP growth actually slowed from 1.6% q/q to 1.1% q/q."
"The AUD was left little changed as relative rates moved in its favour (5yr OZ/US spread +5bp after reaching a 5year low yesterday), counteracting the terms of trade deterioration. AUD/NZD has broken above its 200-day average at 1.0985, and looks set to rally a good bit further. That reinforces a view that NZD is a better sell than AUD, which will remain in its range for a while longer."