AUD/USD Weekly Forecast – 05 September

Saturday, Sep 03 2016

Events that marked the week:

From Australia, on Tuesday, Building Approvals data was published. The trend estimate for total dwellings approved rose 0.2% in July and has risen for eight months. The seasonally adjusted estimate for total dwellings approved rose 11.3% in July after falling for two months. The trend estimate for private sector houses approved fell 0.5% in July and has fallen for five months. The seasonally adjusted estimate for private sector houses fell 0.5% in July and has fallen for two months. The trend estimate for private sector dwellings excluding houses rose 0.9% in July and has risen for eight months. The seasonally adjusted estimate for private sector dwellings excluding houses rose 23.0% in July after falling for two months.

Thursday's session brought Australian Retail Sales and Private Capital Expenditure figures, while from China Manufacturing PMI data was released. Australian Retail Sales rose 0.1% in July 2016. This follows a rise of 0.1% in June 2016 and a rise of 0.1% in May 2016. The seasonally adjusted estimate was relatively unchanged (0.0%) in July 2016. This follows a rise of 0.1% in June 2016 and a rise of 0.1% in May 2016. In trend terms, Australian turnover rose 2.7% in July 2016 compared with July 2015.

Separate report on Private Capital Expenditure showed that it fell 3.8% in the June quarter 2016 while the seasonally adjusted estimate fell by 5.4%. The trend volume estimate for buildings and structures fell by 7.0% in the June quarter 2016 while the seasonally adjusted estimate fell by 10.6%. The trend volume estimate for equipment, plant and machinery rose by 1.9% in the June quarter 2016 while the seasonally adjusted estimate rose by 2.8%.

Operating conditions stagnated across China’s manufacturing sector during August, after a marginal improvement in the previous month. Commenting on the China General Manufacturing PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said: “The Caixin China General Manufacturing PMI for August slipped to 50.0, after a short-lived uptick in July. The index readings for output, new orders and stocks of purchases all declined from the previous month, with the index for inventories of purchases falling back to the territory of contraction. The stagnation that follows tentative signs of recovery in July may have been caused by a temporary tightening of proactive fiscal policies. Downward pressure on China’s economy remains and government support to stabilize growth must continue.”

This week markets will be looking at:

Company Operating Profits (Monday 3:30)

Cash Rate/RBA Rate Statement (Tuesday 3:30)

GDP (Wednesday 3:30)

Trade Balance (Thursday 3:30)

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