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Greg Gibbs, Analyst at Amplifying Global FX Capital, explains that Australia’s recent economic reports continue to support the notion that the RBA can hold rates steady for some time.    

Key Quotes

“There is some evidence of peaking, making the AUD more vulnerable to other influences, including a stronger USD, weaker confidence in China, and domestic concerns over the property market and political cycle.”

“The NAB business survey shows that conditions remain relatively solid, albeit down from highs earlier in the year.”

“The RBA can still argue that labour market indicators are strong, although job ads and skilled vacancies are below peaks earlier in the year.”

“The construction sector PMI from AiG is showing the effects of peaking in the housing market, slipping to 49.3, a low since Jan-2017.   AiG noted weakness in houses and apartment construction, offset by strength in engineering, led by publicly funded infrastructure projects.”

“The newer PMI data from Markit, sponsored by CBA,  are showing more negative trends than the AiG series for services and manufacturing.”