When is the Aussie Q4 GDP release and how could it affect the AUD/USD?

Australian GDP overview

Having recently battled the Reserve Bank of Australia’s (RBA) monetary policy meeting updates, without much noise, AUD/USD traders are now gearing up for Australia’s fourth-quarter (Q4) Gross Domestic Product (GDP) figures, up for publishing at 00:30 GMT on Wednesday.

The recent data from Australia have been upbeat, but the RBA defended the status-quo during the latest monetary policy meeting on Tuesday while flashing mixed signals on the economic recovery.

Other than being the headline economic data, today’s GDP figures become even more important as they portray the Aussie economy’s performance out of the pandemic period. Also, AUD/USD struggles to keep the recovery moves to target a fresh high since February 2018 and hence the traders are waiting for fresh directives.

Forecasts suggest the annualized pace of economic growth to come in at -1.8%, above the previous period's -3.8%, while the quarter-on-quarter (QoQ) numbers could mark the disappointment if easing to 2.5% versus 3.3% prior.

Ahead of the outcome, Westpac said:

Westpac is forecasting GDP to rise by 2.5% quarterly (in line with the median forecast). This would see year-ended growth at -1.8% yearly. The quarterly partials point to clear upside risks – potentially GDP could print close to 3%, following the 3.3% lift in Q3. All other things being equal, we require consumer spending to print at 3.7% for GDP to land on our 2.5% forecast.

TD Securities expects,

Based on RBA Feb SoMP forecasts, the Bank sees Dec'20 Q4 GDP coming in at +2.3% q/q, -2.0% y/y. Given the upside surprises on most data prints, we expect a beat at 2.9% q/q, -1.4% y/y. Separately, we anticipate wages and payroll jobs in the weekly ABS payrolls for the week ending 13 Feb to continue its uptrend, as labor demand remains healthy with ANZ job ads rising for the eighth consecutive month in Jan. To recap, the prior weekly ABS series for the period ending 30 Jan 2020 showed payrolls rising by 1.3% m/m while wages roll by 0.4%. Payroll jobs are currently around the same level as last year.

How could it affect the AUD/USD?

AUD/USD traders turn cautious ahead of the key event while fading the previous two-day run-up from the weekly top of 0.7838 to currently around 0.7820. Other than the pre-data sentiment, upbeat S&P 500 Futures, led by recent optimism in the US and the UK, also seems to probe the bulls.

It should, however, be noted that most market analysts anticipate welcome figures from the Aussie GDP and hence any disappointment, which is less likely based on the central bank’s latest comments, could derail the latest corrective pullback. On the contrary, strong GDP figures will need the US dollar’s extended weakness to keep the AUD/USD bulls happy.

Technically, a four-month-old ascending trend line and 50-day EMA, respectively around 0.7740 and 0.7700, could challenge the quote’s surprise declines while bulls need a clear break of 0.7880 to tighten the grips.

Key notes

AUD/USD Forecast: Back above 0.7800 as RBA’s Lowe provides relief

Australian GDP Preview: Prospects for a sustained economic recovery

AUD/USD reclaims 0.7800 level ahead of Aussie Q4 GDP numbers

About the Aussie GDP release

The Gross Domestic Product released by the Australian Bureau of Statistics is a measure of the total value of all goods and services produced by Australia. The GDP is considered as a broad measure of the economic activity and health. A rising trend has a positive effect on the AUD, while a falling trend is seen as negative (or bearish) for the AUD.

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