HALISTER1: CORRECT: Aussie May Revisit Triple Top on GDP, Lowe: Analysis

CORRECT: Aussie May Revisit Triple Top on GDP, Lowe: Analysis

(Bloomberg) -- (Corrects quarter to 2Q in first and third bullets.)
  • A series of AUD/USD triple tops near 0.7750 may be revisited by end-Sept if 2Q GDP beats estimates and new RBA governor Philip Lowe fails to jawbone Aussie lower in response, writes Bloomberg strategist Michael G. Wilson.
  • Spot has formed a solid base off 0.7490 100-DMA, which is also August 31 low
    • Triple tops comprise of 0.7756/50/49 highs in Aug.
    • Slow stochastic momentum indicator at 34 and climbing
    • AUD/USD currently +0.20% at 0.7597
  • 2Q GDP probably gained 3.2% y/y vs. prev. 3.1%, according to median est. of 29 economists surveyed by Bloomberg; ests. ranged from 3.0% to 3.5%; data due tomorrow at 11:30am local
  • Incoming RBA Governor Lowe will deliver introductory remarks on Thursday
    • In March 2016, Lowe said “I think, like everyone, we would welcome a slightly lower exchange rate” to help with rebalancing of economy; AUD/USD was trading at 0.7455 back then
    • When asked in Dec. 2012 about threshold for unconventional monetary policy, Lowe said hypothetically it would be ’around 1 percent, plus or minus a bit,’; policy rate then was double the current 1.5%
  • A GDP data beat may push any chance of an RBA cut into 2Q17
  • Fed pricing in wake of NFP has been dialed back; likewise, a host of forecasters who’d called for a September Fed hike
    • See Research Roundup
  • NOTE: Michael G. Wilson is an FX strategist who writes for First Word. The observations he makes are his own.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
8223572Z US (Jawbone Inc)
40005Z AU (Reserve Bank of Australia)

People
Philip Lowe (Reserve Bank of Australia)

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