Thursday, October 22, 2015

AUD: EL-Nino is back again to haunt Aussie - ANZ

FXStreet (Delhi) – Research Team at ANZ, expect that the current severe El Nino weather event, which on current trends will soon be the strongest such event in a number of years has already seen a 15% reduction in Australian wheat yields.

Key Quotes

“But Australia may escape the worst of it. The worst of the dryness to date has been in Victoria, which is a much smaller grain producer than New South Wales, Western Australia and South Australia.”

“We’ve also had above-average rainfall in August which has helped sustain subsoil moisture, and slightly below average temperatures compared with other drought years.”

“As a result, we believe the impact on Australia’s GDP growth will be much less than what we experienced as a result of the 2002 and 2006 droughts. In each of these cases, farm output subtracted around 0.5ppts from GDP growth over a two year period. We’re not expecting that this time around.”
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