The Australian economy last week experienced contradicting macro-economic figures. Australia’s GDP reading came in tremendously above par. The GDP figure came in at 0.9%; the expectations were sat on 0.7% before the release. Investors considered this a strong move up for a quartile release; the figure pushed the AUD/USD higher momentarily.
The Australian Trade Balance saw the reversal of that AUDUSD push, late last week. The Trade Balance figure was expected to be a weak figure of -2.17 Billion; however, the release came in at -3.89 Billion. This means that the Australian economy exported far less than in imported this month.
Heading into this week, yesterday we had plenty of AUD data to go around. The releases yesterday showed investors that the Business Confidence levels in Australia had dramatically increased. The indexed figure came in at 7 from a previous figure of 3; the figure that was released yesterday was 3-4 index points above the 12 month average.
The next data set of note was China’s Consumer Price Index (CPI) figure. The release actually pushed the AUD lower after the positive Business confidence release, mentioned above. The CPI figure from China was expected to be at a lower revised figure of 1.3% year on year (Y/y), previously 1.5% (Y/y).
Interestingly to note, the ANZ Job Advertisements figure released yesterday suggested that there was no expansion in job advertisements. This translates to job vacancies; therefore the figure has placed stress on Australia’s next two big releases this week; the Unemployment rate and Employment change. Job Advertisements are generally considered to be a leading indicator of employment conditions, therefore, so the chances of a positive unemployment figure are reduced.
Today, Governor of The Reserve Bank of Australia, Glenn Stevens, is scheduled to make an announcement at 12.30pm AEST. Governor Stevens is expected to talk about the slower than expected pace of growth in Australia and also weaker business capital expenditure in both mining and non-mining sectors. The speech is expected to give no assistance to the AUD, on the contrary, it may move the USD higher against the AUD.