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05.09.2019 18:24

Australia's trade helps GDP avoid zero or even negative result – Westpac

Sean Callow, an analyst at Westpac, suggests that for Australia, the record A$20bn trade surplus helped GDP avoid a zero or even negative result.

  • It was stunning to see Australia report its first current account surplus since 1975, around 1% of GDP, with the trade surplus 4% of GDP.
  • Beyond that though, there wasn’t much to cheer. Growth over the year of 1.4% was the weakest since 2009 and slower than population growth. The growth drivers are a concern too, with private demand contracting – see chart. Business investment is falling, construction is yet to recover and consumer spending is up just 1.4%yr.
  • We can at least hope for better consumption data once the targeted tax cuts reach household bank accounts. And infrastructure activity should also pick up, as the RBA noted in its statement this week. It predicted growth would “strengthen gradually to be around trend over the next couple of years.
  • But this implies no real progress on lowering Australia’s unemployment rate and what the RBA terms the “trade and technology disputes” remain a major headwind, even if today brought a glimmer of hope as the US and China at least confirmed high-level trade talks in early October.
  • The RBA’s wary optimism, GDP data and more positive headlines on US-China trade helped AUD lead the G10 over the past week. It would be surprising if it can keep top spot in the week ahead.”


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Market focus

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  • Chinese vice foreign minister says progress made in trade talks with U.S
  • BoE reform needed to boost firepower for downturns - think tank
  • Earnings Season in U.S.: Major Reports of the Week
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Forex is open 24 hours a day, 5 days a week (except national holidays), and it can be broken up to the following four regional markets: Australia and Oceania, Asia, Europe, and America. A Forex trading session opens at 23:00 GMT on Sunday in Japan and closes at 22:00 GMT on Friday in the USA.

 
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Pacific Wellington 19:00 04:00 22:00 07:00 22:00 07:00
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Sydney 21:00 06:00 00:00 09:00 00:00 09:00
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Asian Tokyo 23:00 08:00 02:00 11:00 02:00 11:00
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Hong Kong, Singapore 00:00 09:00 03:00 12:00 03:00 12:00
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European Frankfurt, Zurich, Paris 06:00 15:00 09:00 18:00 9:00 18:00
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London 07:00 16:00 10:00 19:00 10:00 19:00
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American New York 12:00 21:00 15:00 00:00 15:00 00:00
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Chicago 13:00 22:00 16:00 01:00 16:00 01:00