The US wages data and trade policy announcements that may come before end week will keep global markets on edge.
Key Quotes:
“There is scope for a corrective bounce in EM assets, but the prospect of further US rate rises and an escalation of the US-China trade war may hang over global markets for some time.”
“The Australian GDP report was much stronger than expected, rising at an annualised 4.1% in H1, well above the trend growth rate of 2.75%, suggesting that the economy has significant momentum.”
“Global and domestic risks to growth have become more elevated, but the economy appears reasonably placed to take a few punches.”
“The AUD has built in a discount for these increased risks and is cheap relative to Australia’s still solid commodity export prices, helping support income growth.”
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