The Q3 Australian GDP has come in at a huge miss, data here
AUD response (and where are the bids and offers now?), here
Economists responses (these via Reuters - kudos for the quick work):
SU-LIN ONG, SENIOR ECONOMIST, RBC CAPITAL MARKETS
- "First contraction since 2011 with weakness across the board. We are likely to see the RBA's growth forecasts revised in February.
- "The outcome is consistent with the recent raft of weak data in the last four to six weeks and we could argue this will continue into 2017. The RBA still has some ammunition, but there is a good chance of a recession. We still have a cut for the second quarter of next year."
MICHAEL BLYTHE, CHIEF ECONOMIST, COMMONWEALTH BANK OF AUSTRALIA
- "This is much weaker than expected. Encouraging signs are on the income side of the accounts where we are starting to see the benefit from rising commodity prices flow through.
- "For the RBA it highlights that some of the speculation of market pricing for rate rises that's now appearing looks overdone, particularly when you look at the inflation component of today's data. It's showing the core inflation measures are very subdued and clearly the Reserve Bank won't be rushing to raise rates in that environment."
TAPAS STRICKLAND, ECONOMIST, NATIONAL AUSTRALIA BANK
- "It seems like the downside risk has been realised. There's a lot of references to weather having an impact. If you recall, the winter we've just had was the second wettest in 100 years so that reduced the number of days construction projects could be completed.
- "We don't expect such a big decline next quarter. We would expect GDP to bounce a bit next quarter, so no risk of recession that might be grabbing some headlines. It plays into the fantasy of rates needing to be cut next year. The numbers today give some credence to that view."
TOM KENNEDY, ECONOMIST, JP MORGAN, SYDNEY
- "One of the weakest prints we have had in some time. I think it's going to be a concern for the Reserve Bank of Australia obviously because the lower growth you get, the less inflation you get. Inflation really is driving the current rate cycle so this makes the RBA re-assess their growth outlook for the second half of the year and also for 2017.
- "There is always a chance of another negative quarter but I do think it's fairly unlikely. The reason for that is that we are getting this quite large lift from exports. But the February meeting still looks live for the RBA."
(Bolding above is mine - & note the strong differences in opinion)
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While I am on 'responses', Australian treasurer Scott Morrison has been commenting. A lot of his remarks have been the normal political b/s and smoke-blowing. But, he did make a good point:
- "This is the 12th consecutive quarter where new business investment has declined"
While at ForexLive I have been banging on about the 'capex cliff' for those past 3 years (and more), and how investment in other sectors has not quite managed to step it up. A challenge indeed. ... Amongst other challenges for the Australian economy, but it is one of the root issues.
