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The Australian economy performed solidly over the past year, with 1Q GDP confirming above trend real GDP growth of 3.1%, notes the analysis team at Westpac.

Key Quotes

“The global backdrop was more supportive, so too commodity prices. However, areas of weakness remain, around the consumer and housing, as well as a further slowing in China.”

“RBA expects growth to be above 3% by the end of 2018, we are more circumspect.”

“Although, while wages growth remains low and substantial slack remains in the labour market, we characterise this likely progress as glacial rather than gradual. Thus we remain comfortable with our RBA on hold call for 2018 and 2019.”

“The AUD is at 13 month lows and is vulnerable to further escalation in US/China trade spat.”