Breaking: Aussie GDP contracts more than expected, hurting AUD crosses

Australia’s Q2 GDP report is out as follows:

The partial lockdown/shutdown of the economy in response to Covid-19 is reflected in these numbers.

• AUSTRALIA Q2 REAL GDP -7.0 PCT QTR/QTR, S/ADJ (REUTERS POLL -5.9 PCT)
•  AUSTRALIA Q2 REAL GDP -6.3 PCT YR/YR, S/ADJ (REUTERS POLL -5.2 PCT)
•  AUSTRALIA Q2 FINAL CONSUMPTION EXPENDITURE -8.1 PCT, S/ADJ
• AUSTRALIA Q2 GROSS FIXED CAPITAL EXPENDITURE -4.9 PCT, S/ADJ
•  AUSTRALIA Q2 CHAIN PRICE INDEX -0.2 PCT

However, while it is a worse than expected print, the data, when comparing the -6.3 YoY to -9.1% in the US, -15% in the Eurozone and -21.7% in the UK, could attract investment to the Aussie after the initial knee-jerk.

Remember, the Fed has out-doved other central banks. 

AUD is lower on the data.

AUD/NZD is lower, as a result, also following Orr's comments about the currency rate. 

More to come...

Description

The Gross Domestic Product released by the Australian Bureau of Statistics is a measure of the total value of all goods and services produced by Australia. The GDP is considered as a broad measure of the economic activity and health. A rising trend has a positive effect on the AUD, while a falling trend is seen as negative (or bearish) for the AUD.