The Australian Industry Group Performance of Services Index for December came in at 43.2. This is the 11 consecutive month of contraction (sub-50 reading) for this indicator. This is the updated chart of its performance from Bloomberg:
Ugly performance; expect a sub-50 reading for January, too, to give us a nice full year of contraction (actually, not nice at all). The AUD is following the ‘risk-currency’ sell-off this morning on the back of the ‘end-of-QE’ Fed Minutes release. A lower AUD is a desire of the Australian Government and of the RBA, not that either seems able to do very much to help achieve this at present; a lower AUD would be a boost for the Australian economy.
From the AIG report:
sub-sectors linked to household spending including retail trade and accommodation, cafes & restaurants all reported declines in activity in December. Finance & insurance was the only sub-sector to expand in the month.
