Australia is printing a bunch of top tier reports this week! Which events can affect the Aussie’s intraweek action?
Retail sales (Sept 3, 2:30 am GMT)
Retail activity jumped by 0.4% in June, much faster than May’s 0.1% increase and the 0.3% uptick that analysts had expected. Heck, it’s the fastest growth in four months!
Turned out, optimism over the housing market, government tax rebates, and central bank rate cuts all helped boost consumer sentiment and spending for the month. The Aussie inched higher across the board and maintained its lead until the London session started.
This week market geeks see retail sales gaining by another 0.2% for the month of July.
On a regular day I’ll probably tell you guys to expect direct correlation between the retail sales report and Aussie’s intraday action. While that could still hold this time, you should also note that the current account balance AND RBA’s policy decision will be printed on the same trading session. That means there’s more than Australia’s retail activity to keep the bulls and bears on their toes!
RBA’s policy statement (Sept 3, 5:30 am GMT)
After cutting its rates in July, the Reserve Bank of Australia (RBA) maintained its policies steady in August. However, the central bank also noted that “an extended period of low interest rates will be required” to achieve its growth and inflation targets.
The dovish tone weighed on the Aussie at the time of the release, but the bulls soon stepped in when there was no outright hint of another rate cut. The party didn’t last long, however, as London and U.S. session jitters eventually erased the Aussie’s intraday gains.
This week analysts expect the central bank to maintain its policies steady for another month. This means we gotta pay attention to the RBA’s statement, which could print increased concerns over the risk factors that it had mentioned last month.
Quarterly GDP (Sept 4, 2:30 am GMT)Australia’s economy grew by 0.4% in Q1 2019, higher than the 0.2% uptick seen in Q4 2018 but slower than the 0.5% increase that analysts had expected.
The annualized figure didn’t fare better. GDP grew by 1.8% from a year ago in Q1 2019, weaker than Q4 2018’s 2.3% increase. In fact, it’s the weakest growth since Global Financial Crisis! Yikes!
Details tell us that higher government spending and exports had only marginally offset slowdowns in fixed investment and household consumption.
The slower-than-expected growth got mixed in with dovish comments from RBA’s Lowe at the time, so Aussie ended up falling for the rest of the trading day.
Did the economy recover a bit in Q2 2019? Market players expect to see the quarterly growth improve from 0.4% to 0.5%, but they also see annualized growth slip from 1.8% to 1.5%.
Missed last week’s price action? Read AUD’s price recap for August 26 – 30!