The dollar regained some of its losses from the previous session while a better-than-expected GDP report boosted the Aussie.
- NZ manufacturing sales (q/q) up by 2.8% vs. 0.3% expected, 1.3% previous
- Australia’s AIG construction index up from 51.9 to 56.7 in May
- Australia’s GDP increases by 0.3% vs. 0.2% expected, 1.1% previous
- Japan’s leading indicators slips from 105.5% to 104.5%
Australia’s GDP release
No sharp increase in growth? No problem! Australia’s GDP finally came out and it showed a 0.3% uptick, higher than the expected 0.2% increase but lower than Q4 2016’s 1.1% growth figure. On an annualized basis, growth is up by 1.7%, slower than the previous 2.4% uptick but still faster than the expected 1.5% growth.
The report came a day after the RBA hinted that growth “is expected to have slowed in the March quarter” and a miss in a GDP-contributing factor from the weak current account report.
But apparently, positive final domestic demand as well as inventory changes offset the weak trade conditions and drop in dwelling investment.
Details tell us that exports of goods and services fell by 1.6% after 10 consecutive quarters of growth while imports popped up by 1.8%. Meanwhile, an increase in rent other dwelling services pushed final household consumption expenditure 0.5% higher.
Dwellings investment fell by 4.4% during the quarter and took out 0.3 points from the GDP. Luckily, increases in mining and wholesale and retail trade inventories added 0.4 points to the GDP.
Mixed risk sentiment
With not a lot of economic reports on the docket, Asian session traded cautiously ahead of tomorrow’s potential catalysts.
If you recall, the U.K. will conduct its general elections, former FBI head honcho Comey will testify in the U.S. Senate, and the ECB is set to publish its policy decision (read Forex Gump’s trading guide here). Talk about a “Super Thursday!”
The subdued tone resulted to Nikkei trading 0.17% lower, the Shanghai index rising by 0.93%, Hang Seng improving by 0.10%, and Australia’s A SX 200 slipping by 0.14%.
Major Market Mover(s):
The comdoll found support from a relatively positive Chinese market trading and Australia’s better-than-expected GDP report.
AUD/USD is up by 32 pips (+0.43%) to .7543, AUD/JPY jumped by 42 pips (+0.51%), and AUD/NZD improved by 66 pips (+0.63%) to 1.0516.
The Greenback managed to recoup some of its losses after seeing bloodbath in the previous session.
EUR/USD dipped by 14 pips (-0.12%) to 1.1264, GBP/USD remained near 1.2900, USD/JPY inched 8 pips higher (+0.07%) to 109.50, and USD/CHF popped up by 12 pips (+0.13%) to .9631.
Watch Out For:
- 6:00 am GMT: Germany’s factory orders (-0.2% expected, 1.0% previous)
- 7:00 am GMT: Switzerland’s foreign currency reserves
- 7:30 am GMT: U.K.’s Halifax house price index (-0.2% expected, -0.1% previous)
- 9:00 am GMT: Italy’s retail sales (0.2% expected, 0.0% previous)