6 Mar 2014
Flash: Australian data much stronger than expected - RBS
FXStreet (Bali) - Greg Gibbs, FX Strategist at RBS, outlines the surprisingly strong Australian economic data published today.
Key Quotes
"The Australian trade balance jumped from $A597mn in Dec to $A1,433m in Jan, a high since Aug-2011, much above $A100m expected. Exports rose 4%m/m, rising solidly across all goods categories, whiles services exports fell 1%m/m. Imports rose 1%m/m (the imports number was held down by a 9% fall in capital goods imports, while intermediate and other goods imports rose 9%, and consumption goods and services imports rose 1%m/m)."
"Retail sales trend estimate rose 0.7%m/m in Jan (annualised at 8.7%), now stable at this solid rate for 5 months since September. Seasonally adjusted, sales rose 1.2% m/m in Jan, well above 0.4% expected and was revised up from 0.5% to 0.7%m/m in Dec. solid gains were made in all key sub-categories including household goods (+1.5%m/m) and this sector should strengthen further in light of increased housing market activity."
"The data add to the surprising strength in most activity indicators over the last week suggesting the domestic economy is considerably stronger than forecasts of most economists on the street."
"The rates market reaction is remarkably muted with Jun and Dec three month bill yields only up 1 and 2bp, and three year bond yields up 4bp. The market is reluctant to buy into the idea that the recovery will be sustained with a down-turn in mining investment under-way. Nevertheless, the pressure for higher rate and a stronger AUD should continue, barring a significant global surprise."
Key Quotes
"The Australian trade balance jumped from $A597mn in Dec to $A1,433m in Jan, a high since Aug-2011, much above $A100m expected. Exports rose 4%m/m, rising solidly across all goods categories, whiles services exports fell 1%m/m. Imports rose 1%m/m (the imports number was held down by a 9% fall in capital goods imports, while intermediate and other goods imports rose 9%, and consumption goods and services imports rose 1%m/m)."
"Retail sales trend estimate rose 0.7%m/m in Jan (annualised at 8.7%), now stable at this solid rate for 5 months since September. Seasonally adjusted, sales rose 1.2% m/m in Jan, well above 0.4% expected and was revised up from 0.5% to 0.7%m/m in Dec. solid gains were made in all key sub-categories including household goods (+1.5%m/m) and this sector should strengthen further in light of increased housing market activity."
"The data add to the surprising strength in most activity indicators over the last week suggesting the domestic economy is considerably stronger than forecasts of most economists on the street."
"The rates market reaction is remarkably muted with Jun and Dec three month bill yields only up 1 and 2bp, and three year bond yields up 4bp. The market is reluctant to buy into the idea that the recovery will be sustained with a down-turn in mining investment under-way. Nevertheless, the pressure for higher rate and a stronger AUD should continue, barring a significant global surprise."