FXStreet (Delhi) – Prashant Newnaha, Rates Strategist at TD Securities, notes that the value of Australian Construction activity in Q3 fell 3.6%, more than the 2% decline the market had pencilled in.
Key Quotes
“This was the largest percentage quarterly drop since 2000 and was largely due to the decline in resource related engineering, -7.3%/qtr with investment in housing (+2%/qtr) and office buildings (-1.9%) failing to plug the gap. What today’s data shows is that the Australian economy is heavily reliant on housing.”
“Looking ahead we expect the large pipeline of work remaining to push construction higher over the next few quarters. As a result, value of construction activity will continue to remain reliant on housing.”
“There were no real monetary policy implications from the RBA Gov’s speech titled ‘The Long Run’ to the Australian Business Economists dinner. He suggested market participants ‘chill out’ over the Christmas period and assess the data then, more or less dismissing the possibility of a Dec cut, but then again the market is virtually prices for that anyway.”
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