Earlier I posted on Goldman Sachs' call for the AUD/USD to 67 cents in 6 months
More details now
Here's what I had earlier:
- Sees AUD/USD trough of 67 cents in 6 months
- Sees a 1 in 3 chance of an Aussie recession in the coming year
- Restates their forecast that the RBA will cut the cash rate to 1.75% at the November meeting
- Cuts Australian growth rate forecast to 2% vs 2.25%
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GS are concerned about a potential fall in housing investment (they reckon housing investment has peaked ... I'm not sure how that is reconciled with the huge surge in approvals we've seen,,, there is plenty of housing construction work in the pipeline) combining with low business investment
GS also cite the usual suspects:
- Weak commodity prices
- Labour market slack
- Falling company profits
- Government spending cuts (note, it was surprising higher government spending that gave Q2 GDP a boost. There is an election due in Australia in about a year, too ... you can expect the government spending taps to be opened heading into that)
Say a recession it would likely be a shallow and quick as export volumes are expected to rebound. GS specifically cite an increase in LNG shipments.
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This is from a note from economist Tim Toohey at GS.
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ADDEd - OK, here we go, the Australian Financial Review have a piece up on it.
