Australia GDP Expands at the Fastest Pace in 2-Years

Daily Analysis - 01/06/2016

Australia Quarterly GDP Expands 1.10%, Beating Estimates of A 0.60% Growth

Riding on the tailwinds of consumer spending, increased net exports and a rebound in the housing sector, Australia’s quarterly GDP jumped 1.10% extending the 0.60% quarterly growth in the fourth quarter of 2015. On an annualized basis, GDP inched 0.10% higher from the fourth quarter.

Japan Household Spending Falls in April

Household spending in Japan declined for the second consecutive month in April, falling 0.40%. The decline was April was moderate compared to March's -5.30% dip, data from the Ministry of Internal Affairs and Communications showed on Tuesday. Economists expected to see a decline of 1.30% for the month. The weak data is likely to further weigh on the decision to delay the much talked about sales tax hike which is intended to hike the current 8.00% to 10.00% - recently postponed until October 2019. Household spending or consumption which accounts for over 60% of Japan's economic output hinted at early signs that the economy is not out of the woods yet.

Eurozone CPI -0.10% Year-Over-Year

The Consumer Price Index in May fell -0.10% in the Eurozone, according to data from Eurostat on Tuesday. The decline in inflation was in line with analyst expectations and shows a second month of weakness after it fell -0.20% in April. Energy prices were down -8.10% annually, slightly moderate compared to -8.70% the prior month. The May inflation data is the preliminary estimate and the confirmed inflation data will be released on June 16th. The euro did not react much to the news release, ahead of the ECB's monetary policy meeting on Thursday.

Canada's Economy Expanded 2.40% in the First Quarter

Canada's GDP in the first quarter grew at a pace of 2.40%, less than the estimated 2.80% in a report from Statistics Canada. However, first quarter growth was stronger than the fourth quarter's downward revised quarterly GDP growth of 0.50%. On a year over year basis, Canada's GDP grew at a pace of 1.10%, slight below the 1.40% growth seen previously. Despite failing to match the median estimates, overall growth continued to remain the strongest in over a year, with gains coming from exports of goods and services which increased 6.90%.

US ISM Manufacturing Index Expected to Decline

ISM manufacturing index data will be the first important release at the start of the new month. Expectations call for the May ISM report to show that manufacturing activity in the US has slipped to 50.5 in May following moderation near 50.8 in April. The ISM rose to 51.8 in March marking a move back to expansion after staying below the 50 index level for nearly five months prior. The broadly weaker pace in the regional manufacturing index gives weight to a potential downside surprise.