Australia’s economic growth fastest in the last 6 years; trade war still casting a shadow over euro zone growth
On Wednesday we had a vast of important macro-economic releases, where the day started with the Australian GDP numbers, which have passed all the expectations where the economic growth was 0.9%, as opposed to the expected 0.7%. As Reuters have reported, the rapid population growth has increased the housing demand and infrastructure, as well as boosting the consumer spending. The GDP figures were 3.4% higher than the previous year, the strongest result in the past six years. As the Australian Governor, Philip Lowe had mentioned on Tuesday, the economy is moving in the right direction with attention placed on reaching full employment and inflation returning to around the midpoint of the target range. As a reminder, the rates have been kept unchanged at 1.5% and economists are not seeing a change happening in at least the next 2 years.
An ongoing fear of a growing global trade war is lingering over Europe, influencing the optimism of investors. Indeed, the EU business activity picked up in August, however there are worries that the pace will not be kept, as the August euro zone composite PMI came at 54.5 from 54.3 in July, little above the earlier estimate of 54.4. In addition, worries about protectionism that may escalate in the future may have an impact on the business despite the small effect that the US policies have had on the EU until now.
Regarding the UK, services PMI reading came with an increase and rose to 54.3 in the previous month, while the expected numbers were 53.9. The numbers have improved the 3rd quarter growth outlook and the business activity had been enhanced by an increase in work, as the lack of skilled staff have pushed the salaries in August.
From Canada we had positive news regarding the trade balance, where according to Statistics Canada, the country has faced the smallest trade deficit in over one and a half years, thanks to the higher prices for crude oil that increased the exports by 0.8%.
ECONOMIC CALENDAR EVENTS FOR SEPTEMBER 6th
AUD Trade Balance
EUR German Factory Orders m/m
USD ADP Non-Farm Employment Change
USD ISM Non-Manufacturing PMI
CAD Building Permits m/m