Daily Commentary BY THE CURVE TEAM –

Data Continues To Hit The Mark

31st of August, 2017

After a relatively quiet couple of days on the data front, markets were active overnight with a couple of key releases both domestically and offshore.

Starting offshore and confidence in the US economy has been boosted upon the release of strong employment and GDP data. ADP Job Gains printed at +237,000 in August, considerably stronger than market expectations. This bodes well for Friday’s release of Non-Farm Payrolls.

On the back of stronger household spending and business investment, US Q2 GDP printed at 3%, well above the 2.7% expected by markets. While it is expected that the Fed will announce balance sheet tapering in September, FOMC members will be watching carefully to see if this momentum continues and it could bring the idea of a December rate hike back to the table.

Back home and we saw a sharp spike in construction work done with the index showing a 9.3% rise for Q2. The increase was helped almost entirely by WA with private infrastructure work up $4.0bn and construction work up $4.1bn for the quarter.

This comes on the back of the import of the large floating LNG platform into WA. However, it is expected that this will not impact the next week’s GDP release as the rise in imports will offset the rise in investment.

Domestic capex is due today and the US is due PCE deflators. Both will have their respective central banks watching carefully.

Oliver Parsons

Client Relationship Officer