Release Explanation: The Gross Domestic Product is a comprehensive measure of Australia’s overall production and consumption of goods and services. GDP serves as one of the primary measures of overall economic well-being. GDP announcements generally conform to expectations as the number comes out after most Australian production figures that lead to overall GDP have already been released.
Trade Desk Thoughts: In trend terms, the GDP decreased 0.1 percent and non-farm GDP also decreased by 0.3 percent. However, in seasonally adjusted terms GDP dropped by 0.5 percent which is well below expectations of a 0.2 percent increase. In seasonally adjusted terms, the largest negative contribution was from inventories which were offset by the positive contribution from imports and private business investment. The sectors that also contributed to the decline were manufacturing (-0.5%), property and business services (-0.3%), and wholesale trade (-0.2%).
Forex Technical Reaction: The Australian dollar has dropped like a lead balloon and has given back all the gains from yesterday’s interest rate statement. The pair has fallen to the S1 support level at .6288.