UBS economists have a group of leading indicators of the Australian economy they refer to as “super leaders” – data on the labor market, housing, consumer confidence and retail sales. From a client note:
- Analysis of the super leaders shows, in UBS’ view, the Australian economy is pointing to a better Q3
- Weekly job ads from (job website) SEEK indicate a modest 2% gain in ANZ’s monthly job ads series – this would translate to a 8% growth y/y, the performance best since 2011
- Weekly retail sales series suggest that while July is flat there should be a (albeit modest) +0.5% m/m for August
- ANZ-Roy Morgan weekly consumer confidence conitnues to show the post-budget rebound in the monthly Westpac-MI consumer sentiment index will be maintained
- Home lending data shows a further rise
UBS conclude:
- “Overall, our super-leaders have – over the past couple of weeks – continued to hold onto their post-Budget rebound, and continue to point to a recovery in the economy’s momentum into Q3, after a likely slower Q2 GDP print”
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While I’m on the subject of UBS analysis, the good people over at eFX have a specific AUD/USD view from UBS, but also specifics on EUR/USD, GBP/USD and … flavour of the week … USD/CAD!
- USD/CAD: View is unchanged. We prefer to remain long and add on dips to 1.0920 with stops below 1.0850, for 1.1000. Watch US and Canada GDP on Thursday and Friday respectively
