AUD: Struggling On Key Crosses

Q4 GDP printed exactly in line with consensus at +0.6% q/q & 1.3% y/y up from 0.3% & 0.8% in Q3, but above the RBA’s February forecast of 1.1% y/y. It is in line with the quarterly average over 2018-19. Growth was supported by private, public and overseas demand with domestic demand adding 0.5pp and net exports 0.2pp with the statistical discrepancy detracting 0.15pp. The broad based pickup in Q4 growth is a good sign that the economy is recovering but monthly data will be watched closely to see if it continued in Q1. 

Australia GDP %

• The ABS notes that GDP/capita rose 0.1% q/q, the first rise in eight quarters.
• Household consumption has been an area of uncertainty for some time and it rose 0.4% q/q in Q4 to be up 0.7% y/y, which is still weak but up from 0.3% y/y in Q3. Tax cuts and lower inflation have helped real disposable incomes and discounting also encouraged spending, but essential expenditure made a significant contribution to Q4. The household savings ratio rose 0.2pp to 3.8%.
• Government spending slowed to 0.7% q/q but picked up to 5.1% y/y from 4.7%, the fastest annual rate since the election quarter of Q2 2022. Public corporations’ GFCF remained robust rising 9% q/q to 19% y/y driven by transport and electricity infrastructure, but was partially offset by general government GFCF.
• Private investment added 0.1pp to growth driven by intellectual property but it remains soft up only 0.8% y/y down from Q3’s 1.4%. Machinery & equipment was flat on the year, non-dwelling construction fell 5% y/y, while dwellings grew 2.5% y/y. Inventories added 0.1pp to growth.
• Net exports contributed 0.2pp to GDP but export growth remained soft rising only 0.7% q/q to be up 1.7% y/y although this was up from -1.2% y/y. Exports were driven by services with goods flat. Imports rose only 0.1% q/q in Q4 but are 5.8% y/y higher.

Australia domestic demand y/y%

Source: MNI - Market News/ABS

• The PBOC issued CNY353.2bn of 7-day reverse repo at 1.5%
• Maturities today CNY548.7bn.
• Net liquidity withdrawal CNY195.5bn.
• The PBOC monitors and controls liquidity in the interbank system via the issuance of reverse repo.
• The CFETS Pledged Repo Deposit Institutions 7 Day Weighted Average is at 1.67%, from yesterday’s close of 1.76%.
• China’s overnight interbank repo rate is 1.67%, from yesterday's close of 1.38%
• China’s 7-day interbank repo rate is 1.80% from yesterday's close of 1.68%

• CHINA PBOC CONDUCTS CNY353.2 BLN VIA 7-DAY REVERSE REPO WEDS