Aussie’s quiet price action was rocked by trade-related headlines near the end of last week. Which themes will move the comdoll this week?
Quarterly private capital expenditure (Aug 29, 2:30 am GMT)
Capital spending of private businesses dropped by a seasonally adjusted 1.7% in Q1 2019 when analysts had expected a 0.5% increase. Meanwhile, trend volume estimates also reflected a 0.6% dip.
For newbies out there, you should know that how much private businesses spend can tell us how confident they are about their economic prospects.
Given that this was the third contraction in the last four quarters, the report was bearish for the Aussie. Of course, a weaker-than-expected building approvals report printed at the same time as the CAPEX numbers also didn’t help.
This week market players expect to see a 0.5% growth for Q2 2019. There are no other major data releases around the report’s schedule, so significant hits or miss could affect the Aussie’s intraday price action.
We know from last week’s price action that lower-tier data only has minimal and brief impact on the Aussie’s intraweek trends.This is why it might be more productive to pay attention to global trade updates instead. If you recall, China has just announced its intention to slap around 5% – 10% tariffs on $75 billion worth of U.S. goods.
The tariffs will be effective on September 1 and December 15, the days when the U.S.’ latest tariffs are also scheduled to take effect.
Not one to be out-headlined, Donald Trump also “ordered” U.S. companies to “immediately start looking for an alternative to China.”
….better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing..
— Donald J. Trump (@realDonaldTrump) August 23, 2019
This week pay attention to any additional retaliatory moves from China, as well as escalation of trade restrictions from the U.S.
G7 leaders will also hold meetings this week, which is expected to cough up headlines regarding Brexit, Iran’s nuclear deal, and global trade tensions.
Make sure you’re glued to the tube when these headlines hit!
Missed last week’s price action? Read AUD’s price recap for August 19 – 23!