Australian Q2 GDP is due today
- 0130GMT
- Bloomberg consensus expectation is at +0.4%, which is +2.2% y/y (Note ... I reckon this is off ... a lot of the estimates are outdated ... more on this. below)
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Here's why the 'expected' of 0.4 is suspect ...
On Monday and Tuesday this week we had economic data that is giving us a guide to what the number will be. A lot of the estimates Bloomberg are using in their survey are from before the Monday and Tuesday data
Net exports will detract around 0.6% from Q2 GDP
- More than was thought, around -0.3% was expected... with the China slowdown cited
Inventory builds will detract around 0.25%
This will be substantially offset by an increased spending by the public sector, and investment
- Government spending up 2.2% ... driven by defence spending
- Investment up 4%
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OK, so what should the estimate be?
What I've done is to disregard economist estimates received prior to the Monday and Tuesday data, and only look at the recently received estimates...
Like this:
There are 27 estimates, I crossed out 16 of them
Which left 11 estimates since the data this week
0.2
0.5
0.5
0.1
0.3
0.3
0.1
0.5
0.1
0.4
0.4
If you check that out ... there are two 'modes' ... 0.1 and 0.5 .... which is as clear as mud :-D
On balance, expectations are slightly lower than the 0.4, but not by much it would appear ... and with such a small sample now, and the data so spread .... this could all equate to a volatile AUD response to the data.
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If it comes in negative, expect the AUD to be smashed lower.
I think a negative print is not likely, but I would not rule it out. I'm looking for it around 0.2-0.3 (put a gun to my head and I'll go for 0.2). You can see for yourselves where the market is expecting it (and its market expectations that are important, not mine) given the updated data on Monday and Tuesday.
