Wednesday, December 01, 2010

Australian GDP - blips down quickly

Late Tuesday Night at 12:30am GMT (19:30pm EST) the GDP figures for Australia came out. Here is the data:

AUSTRALIA Q3 GDP
Q/Q: 0.2% V 0.4%E
(lowest since contraction in Q4 of 2008);
Y/Y: 2.7% V 3.4%E
- Q2 q/q revised lower to 1.1% from 1.2%
- Q2 y/y revised lower to 3.1% from 3.3%
GDP Contributions q/q
- Final Consumption 0.6% v 1.6% prior
- Capital Formation 0.9% v 0.6% prior
- Terms of Trade 0.8% v 12.5% prior
- Disposable Income: -0.4% v 5.1% prior

Price blipped down very fast and did a quick pullback nearly to the 38% retrace of this initial news spike but was front-run by a couple of pips. Really would have been safer to get a bit more of a pullback after this initial new reaction move, perhaps somewhere about the 50%. Regardless those willing to jump in quickly ahead of the 38% level were able to pick up a quick +15 pips. Later some half an hour later, price did finally pullback to the 50% level and this did create an opportunity for a +25 pip move, but at this time the Chinese Manufacturing numbers came out very good, so to short the Australian Dollar, which is closely tied to the Chinese Economy would have been risky as well the news was already half an hour in the past. Eventually the AUDUSD did turn around and head much higher as the effect of the hot Chinese data fed traders confidence to take on more risk

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