AUD/USD Fundamental Forecast – June 1, 2016

The AUD/USD added 58 points after a bunch of data in the morning. The US dollar dipped a bit to give back some of its FOMC inspired gains. Building approvals and private sector credit both beat expectations helping the Aussie to climb, while the Current Account widened unexpectedly along with a downward revision to last month.  Australia’s current account deficit was $20.8 billion in the March quarter, seasonally adjusted, from $22.6 billion in the previous quarter, official figures show.

The surplus on goods and services rose by $4.7 billion, which would add 1.1 percentage points to growth in the March quarter measure of gross domestic product (GDP), the Australian Bureau of Statistics said on Tuesday.

The Australian Bureau of Statistics said yesterday that gross operating profits fell 4.7% in the first three months of the year, seasonally-adjusted, for a year-on-year decline of 8.4%.

Mining sector profits fell, while non-mining industries were also weak, down 3.3% for the year. Wages and salaries however rose 0.6% in the quarter to be up a very strong 3.5% for the year – the strongest annual growth since 2012.

The profits figure was worse than expected, but the value of business inventories (stocks) rose 0.4% in the quarter which will translate to a 02% to 0.4% contribution to GDP when none was expected by economists who had penciled in a steady stocks figure compared to the December, 2015 quarter.

UBS noted this, and said a 1.2% quarterly increase in sales would also be positive for one measure of GDP. That was the biggest quarterly rise in sales since 2009 (was this why business inventories were higher than expected?).

After a surprisingly robust 0.6% quarter on quarter expansion in the final quarter of 2015 (for an annual rate of 3.0%), output growth was expected to come in again at 0.6% for the first three months of the year, according to a Bloomberg survey of economists.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Upcoming Economic Events that you should be monitoring:

Wednesday, June 1, 2016

Government Bond Auctions

Date Time       Country           Auction

May 30 11:10 Italy Eur 2-2.5bn 0.45% Jun 2021 BTP

Jun 01 10:30 Denmark Holds bond auction

Jun 01 11:30 Germany Eur 4bn 0% Apr 2021 Bobl

Jun 01 11:30 UK Gbp 2.75bn 1.5% 2021 Gilt

Jun 01 17:20 Sweden Announces details of bond auction on Jun 08

Jun 02 10:30 Spain Holds bond auction

Jun 02 10:50 France Eur 8-9bn 2.25% May 2024, 0.5% May 2026 & 3.25%

Jun 02 11:03 Sweden Sek 0.5bn 0.125% 2019 I/L & Sek 0.5bn 0.125% 2026 I/L bonds

Jun 06 13:00 Norway Details of bond auction on Jun 08

Jun 07 11:00 Netherlands Eur 4-6bn Jan 2022 DSL

Jun 07 11:00 Austria Holds bond auction

Jun 07 11:30 Germany Holds I/L bond auction

Jun 07 11:30 UK 4.5% 2046 Gilt

Jun 08 11:03 Sweden Holds bond auction

Jun 08 11:05 Norway Holds bond auction

Jun 08 11:30 Germany Eur 5bn Jun 2018 Schatz

Jun 08 17:20 Italy Announces details of bond auction

Jun 09 11:30 UK 0.125% 2036 I/L Gilt

Jun 09 17:20 Sweden Announces details of I/L auction on Jun 16