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Aussie Business Conditions/Confidence

The AUD/USD has made new lows for July as that pair is approaching the 1.06 handle even before the mixed release from the NAB. Risk in general is offered across the board on fears of Euro contagion as the JPY and USD appreciate, the details of the release are as follows: 

NAB Business Conditions – Actual:2   Prior:1

NAB Business Confidence – Actual:0   Prior:6

Aussie Employment Report

The Aussie Employment report  moved the AUD/USD ~50 pips higher initially as the better than expected release was driven by move from part-time jobs to full-time jobs.

  • Employment Change – Survey:15K   Actual:23.4K   Prior:7.8K
  • Unemployment Rate – Survey:4.9%   Actual:4.9%   Prior:4.9K
  • Full-Time Employment Change – Actual:59K   Prior:-22K
  • Part-Time Employment Change – Actual:-35.6K   Prior:29.8K
  • Participation Rate -Survey:65.6%   Actual:   Prior:65.6%

RBA leaves cash rate target unchanged at 4.75%; 2011 growth weaker than forecast


* RBA says global economy continuing expansion

* current mildly restrictive policy remains appropriate

* EU debt problems added to uncertainty, international environment challenging

* continues to assess outlook for growth

* year end CPI inflation to remain elevated near term

* business credit has expanded after period of contraction; investment picking up strongly

* high Aussie dollar having noticeable dampening effect

Aud/Usd is off marginally, trading at 1.0680.

NAB Business Confidence

The Aussie remained unchanged below the 1.06 handle as Business Confidence and Conditions came in below the prior readings in May. The details of the release are as follows:

  • NAB Business Conditions – Actual:1   Prior:5
  • NAB Business Confidence – Actual:6   Prior:7

Aussie Employment Report

The Aussie Employment Report again disappointed the market and the AUD/USD fell below the 1.06 handle. Full-time employment was again a burden and the participation rate again fell below expectations.

  • Employment Change – Survey:25K   Actual:7.8K   Prior:-22.1K
  • Unemployment Rate – Survey:4.9%   Actual:4.9%   Prior:4.9%
  • Full-Time Change – Actual:-22K   Prior:-49.1K
  • Part-Time Change – Actual:29.8K   Prior:26.9K
  • Participation Rate – Survey:65.7%   Actual:65.6%   Prior:65.6%

Aussie Trade Balance and Retail Sales

The Aussie April Trade Balance reading came in over 400m softer then expected at 1597M (2000M estimate) and weaker than the March reading (1740M.) The Aussie did however jump ~30 points initially as the seasonally adjusted Retail Sales figure was much better than expected up 1.1% from the prior month (0.4% estimate.)

Aussie Q1 GDP

 The Australian economy contracted 1.2% from Q4 2010, however it expanded by 1.0% from a year ago. Although the reading was slightly softer than expected, the market loves the Aussie as it  jumps above the 1.07 handle with a slightly firmer revision from the prior quarter.

  • GDP (QoQ) – Survey:-1.1%   Actual:-1.2%   Prior:0.7%
  • GDP (YoY) – Survey:1.0%   Actual:1.0%   Prior:2.7%

AIG Performance of Mfg Index

The AIG Performance of Manufacturing Index for May came in again at a reading indicating contraction at 47.7 (48.4 prior.) Higher rates in Australia and rising commodity prices could be to blame for the low reading.

Moody’s cuts Australia’s 4 major banks to Aa2; outlook stable.

The aussie dollar saw some selling on the release.

Westpac Consumer Confidence

The Westpac seasonally adjusted Consumer Confidence reading for May came in at -1.3%, worse than the prior release of 1.2%. The Index reading also fell to 103.9 in May vs. 105.3 in April. The Aussie slipped initally but had firmed up since above the 1.06 handle, but continues to trade below the 4-200hr mavg as the bid on commodities has waned some recently.


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