Daily Market Digest: Australia GDP, UK Manufacturing PMI, US ISM Manufacturing

Australian first quarter GDP beat estimates, rising 1.10% on the quarter with the year over year GDP recorded at 3.10%. UK manufacturing PMI rebounds in May, rising back above 50 and US ISM Manufacturing PMI expands to 51.3 in May.

Today’s Economic events

Australia AIG Manufacturing Index 51.0 vs. 53.4

Japan capital spending q/y 4.20% vs. 1.90%

China manufacturing PMI 50.1 vs. 50.0; non-manufacturing PMI 53.1 vs. 53.5 previously

Australia GDP q/q 1.10% vs. 0.60%; y/y 3.10% vs. 2.70%

China Caixin manufacturing PMI 49.2 vs. 49.3

Japan final manufacturing PMI 47.7 vs. 47.6

Switzerland GDP q/q 0.10% vs. 0.30%

UK Nationwide HPI m/m 0.20% vs. 0.30%

Australia commodity prices y/y -10.0% vs. -9.40%

Switzerland retail sales y/y -1.90% vs. -0.80%

Switzerland manufacturing PMI 55.8 vs. 54.2

Italian manufacturing PMI 52.4 vs. 53.5

France manufacturing PMI 48.4 vs. 48.3

German final manufacturing PMI 52.1 vs. 52.5

Eurozone final manufacturing PMI 51.5 vs. 51.5

UK manufacturing PMI 50.1 vs. 49.6

The UK net lending to individuals m/m 1.6bn vs. 5.3bn

US manufacturing (Markit) PMI 50.7 vs. 50.5

US ISM manufacturing PMI 51.3 vs. 50.5

Coming up

New Zealand global dairy index

Australia GDP rises 3.10% on the year

First quarter economic growth in Australia extended the gains from the fourth quarter, marking one of the strongest quarterly gains in two years. On a quarter over quarter basis, GDP grew 1.10%, beating expectations of a 0.60% increase in the first quarter of 2016. The previous fourth quarter’s GDP data was also revised higher from 0.60% to 0.70%, data from Australian Bureau of Statistics showed on Wednesday. On a year over year basis, Australian GDP was up 3.10% on a seasonally adjusted basis, up from a downward revised 2.90% YoY growth in Q4, 2015. The GDP was expected to beat estimates after the first quarter current account deficit narrowed yesterday.

However, despite the upbeat data, the sub-readings showed a general weakness. Terms of trade, which reflects the fall in the price of exports relative to imports fell 1.90% on the quarter and 11.50% on a year over year basis. Growth was seen coming from exports and household consumption expenditure which contributed 1.0% and 0.40% respectively. Exports increased as mining production was up 6.20%, while in the services sector, financial and insurance services grew 1.80%. While the Australian dollar reacted strongly to the data, the Aussie gave up its gains by the Europe trading session with the Australian ASX falling 1.10%.