Australia's GDP coming up: expect to be disappointed - ANZ

Analysts at ANZ explained that following on from the string of disappointing data, we expect that Q3 GDP today will post a small decline (-0.1% q/q).

Key Quotes:

"This would see annual growth tick down sharply from 3.3% to 2.2%. Some slowdown in GDP growth would be consistent with the apparent loss of momentum in the labour market, but we are surprised by the extent of the weakness evident in these preliminary numbers.

The weakness is quite broadly based, although business investment is down particularly sharply, with last week’s Construction Work Done and CAPEX reports suggesting it will take around 0.5ppt off GDP growth in the quarter. We think this weakness will be short-lived: recent retail sales strength suggests household spending accelerated into Q4.

We also expect housing construction to bounce after the unexpected fall in Q3, and export volumes look likely to pick up more strongly in Q4. While the Q3 result will be well below the RBA’s implied forecast of approximately 3%, we expect that the Bank will also believe the weakness to be temporary, and will be more focused on the wage measure in today’s report, which looks likely to show a pickup."

Aussie GDP: what to expect in AUD/USD?