Look ahead 6/12/23: Australia Q3 GDP growth rate; ADP; BoC rate decision
Australia’s economy swings into focus a day after the RBA kept rates at a 12-year high of 4.35%. In the US, look out for trade balance figures and the ADP employment, ahead of Friday’s all-important jobs report.
(Video Transcript)
Will the year-end rally peter out?
Hello, I'm Angeline Ong, and welcome to your look ahead to Wednesday, 6 December 2023. Now, as we creep towards the end of the year, we've got that feeling that markets are slightly trying to prolong that year-end rally. But will it lose steam? Well, a lot of that will depend on Friday's jobs number.
But ahead of that, we have some other key data points, starting with Australia, where we're expecting the third-quarter gross domestic gross domestic product (GDP) growth rate to come in at around 0.3% quarter-on-quarter, 1.7% year-on-year. That's the forecast.
RBA maintains interest rate at 12-year high
Just showing you the Aussie dollar versus the US dollar, while we are on that, because this is quite a fascinating chart, given that we have the Aussie dollar falling after the Reserve Bank of Australia (RBA) kept the interest rate at a 12-year high of 4.35%.
Now, this was largely expected. But what was interesting was the RBA noted that economic data received since November had been also broadly in line with forecast. Now, moving swiftly on, we have the ADP employment rate of the US. This is ahead of that jobs number, so it will be passed by investors, probably a bit more than usual.
Interest-rate-cut race on between ECB, Fed
We also have trade balance numbers and the EIA crude oil inventories. And out of Canada, yet another Bank of Canada (BoC) or central bank interest rate decision, the overnight rate is expected to remain at 5%. But with all these central banks, what is key will be the differential between major central banks and who cuts first.
I might hasten to add that, at the moment, it looks like the race is between the European Central Bank (ECB) and the Federal Reserve (Fed).
However, don't forget that Canada was one of the first countries to start hiking interest rates. So, it might surprise there. What is also going to be key will be what the BoC says about its outlook for the economy in 2024.
And that's it for now. For more market-moving news, I'll be back on beat the sreet at 1.30pm London time to give you a heads up to the US trading day. Angela Barnes will be on at 7.30am to do the same for the European Open. Until then, you can find me on @AngelineOng and @IG.com on Twitter. This is IGTV.
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