What are the concerns right now for AUD traders - the good, the bad, the you-know-what
We had a few small elections in Australia over the weekend that went not too different to expectations
I posted here:
I said the implications for the Australian dollar were minimla as domestic politics are ranked way down the list of what AUD traders are looking at.
So, what are they looking at.
In summary the main focus is on external factors such as
- US policy. The good GDP figures out on Friday (a miss on estimates but strong nevertheless) indicate there is still a case for higher US rates on the way. For the near term at least (growth is expected to slow a little from Q3, but we will see). Thus the 'high yield' argument for Australia is losing out, and has been for a good long while.
- Commodity/metal prices have been under pressure
- China's economic growth is slowing a touch, but is being met with efforts from authorities to provide stimulus (fiscal, monetary and a lower currency) all the while cognizant of leverage concerns
China / US trade war tensions
So, that is external (what'd I miss? in the comments very welcome). On the domestic front:
funding squeeze in local cash / short term markets
house prices drifting lower may have a 'wealth effect' (not a good one :-D )
High household debt & slow wage growth are weighing on otherwise OK growth
The above is all a list of negative inputs for the AUD
On the positive the recent job numbers were strong (lets see how this develops after prior months had showed a slowing in jobs growth)
And, spring is on the way!