Australia: Economic growth slowed significantly in H2 2018 - NAB

Australia’s Q4 National accounts have confirmed that economic growth slowed significantly in H2 2018 with figures showing substantial weakness in the private sector, led by a fall in dwelling investment and only modest growth in consumption, notes the research team at NAB.

Key Quotes        

“In addition, business investment saw a lift in the non-mining sector, though this was partially offset by ongoing declines in the mining sector. Supporting growth was strong spending in the public sector. While we have updated our forecasts, integrating the Q4 national accounts, we have not significantly changed our view on economic growth over the next two years.”

“We expect GDP to grow by 2.5% over the year to December 2019 before slowing to 2.2% in December 2020. While the labour market has so far remained resilient to the slowing in growth over H2 2018, it likely lags economic activity, and with an outlook for slower growth, we expect little improvement on unemployment from here, in fact we now forecast for the unemployment rate to drift up slightly over the next two years.”

“With inflation currently low, and financial stability risks having abated, we think a forward looking central bank will cut the cash rate from here, to bolster the economy and see better outcomes in the labour market and potentially see inflation return to the centre of the target band sooner. While the timing of a renewed easing cycle is data dependent – any near term cut would be driven by deterioration in the labour market – we think the bank will move to ease rates in July and again in November.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD stable near daily highs

Encouraging German data and a better market mood keeps the common currency afloat, falling short of triggering a relevant rally. Treasury yields´ curve inversion triggers fears of an upcoming US recession.


GBP/USD stabilizes ahead of 1.3180 ahead of Parliament's votes

Speaker John Bercow has chosen three amendments to be voted today at 10:00 GMT, including the Lewis one. PM May speech to lawmakers inconclusive as nothing new came out of it.


USD/JPY: Next corrective ‘target’ is the 38.2% retracement at 109.06

USD/JPY was grounded below the 110 handle at 109.70 overnight on broad declines in global bond yields and stocks with the curve flattening which all suggests that the market has become more concerned about weak global economic growth.


What currencies to buy on a US recession after the yield curve inversion?

Bond markets tend to give signals for the future. In the past, when the 3-month US Treasury yield became higher than the benchmark 10-year yield, it was an initial sign of a recession.

Read full report

Gold: Bulls taking a breather following fresh highs made on $1,320

While central banks have shown a keen bias to hold, which had previously beefed up risk assets and the case for higher stocks, last week, sentiment flipped over with a bearish diversion between long and short term yields following poor data from Germany and the US - The Fed is now in fact expected to cut rates before the year is out and interest rate markets are pricing in a 60% chance of that happening by December - not good news for the greenback and supportive of gold.

Gold News