Morgan Stanley on today's GDP report
The Australian Q4 GDP report is due at 0030 GMT and forecast to show a 2.6% y/y rise along with 0.3% q/q growth.
"We have received all the partial data for tomorrow's GDP release and it leaves our tracking estimate at 0.3%Q, 2.5%Y, implying downside risk to the RBA's forecast of 0.6%Q, in our view. Net exports dragged on growth by -0.2ppts, more than consensus but less than we had forecast, which was the main driver of uplift to our tracking estimate. Government spending was also a bit better than the already strong growth we had forecast: While investment (i.e. infrastructure) only grew 0.3%Q, regular spending was up 1.8%Q."
The specifics to watch will be consumers and housing as those will be seen as forward looking. Lowe is speaking about housing before the data and that shows how closely the central bank is watching the sector.
"We continue to see the RBA on hold over 2019, but acknowledge the risks skew to cuts, which will depend on the extent of the growth deterioration, how much that flows into the jobs market, and how active the RBA is in pivoting policy," Morgan Stanley says.
