Wednesday came with the release of Australia’s quarterly GDP (Gross Domestic Product) for Q2. The quarter-on-quarter variation came at 0.2% although the expected value vas of a 0.4% hike. The year-on-year figure also registered below forecasts, settling at 2% with an expectation of 2.2%. The main factors that favored this growth pace slowdown are believed to be the contraction of activity in the mining and construction sector, coupled with the downslope in exports. On the positive side, some indicators came in over forecast. One of these is the domestic final demand, which revealed a hike in the households’ final consumption of 0.5% for the quarter and 2.5% for the whole year. Still in the consumption sphere, the government spent more with 2.2% than in Q1 and 4.0% for all year long. Switching to the financial sector, the public gross capital formation hiked 4.0% in Q2, managing to even the balance and bring the yearly figure a 0.4%.
In the UK, the seasonally adjusted Markit / CIPS CPMI (Construction Purchasing Manager’s Index) reached 57.3 in the month on August, being on an upward slope from July’s 57.1 threshold. Although the positive sentiment, the index didn’t managed to climb all the way to the forecasted value of 57.5. The Markit SBAI (Service Business Activity Index) followed last month’s trend, going further down from July’s 57.4 to 55.6 in August, hitting May, 2013’s low.
Also an Australian news flash, but this time happening yesterday: July’s retail sales seem to have come under the expected +0.4%, hitting -0.1% although the June figure was +0.7%. The trade balance registered -2,460M versus -3,160 expected.
As of Thursday, ECB (European Central Bank) released information according to which interests will remain at same levels, as of investors expected. The benchmark rate is steady at 0.05%, while the ECB’s deposit rate lingers at -0.2%, the latter being the QE program’s rate. Mario Draghi, the Chief of ECB, declared in the latest press conference that negative inflation may occur in the near future for the Eurozone.
US’s ISM index (The Institute of Supply Management) for the service sector released yesterday is showing a slight turndown in the activity for August, but values continue to hover around the decade’s peak. The 59.00 threshold of August reaches over the expected 58.2, but under July’s 60.3.
The yellow metal shifted its positive tone from the first half of the week, down-sloping to the $1,140/Oz area with recent favorable results for the USD backing it up. A toll on Gold may also come from US’s labor market recovery, which turns up the heat on the possible rate hike from Fed coming in September.
