News & analysis
News & analysis

Australian economy bounces back from recession

2 December 2020 By GO Markets

Share

The Australian economy experienced its first recession in almost three decades having contracted for two consecutive quarters. Back in June, the economy slumped by 7% and encountered the worst fall on record. As other global economies, Australia was heavily impacted by an unprecedented raging pandemic. The fall in the June quarter was driven by private demand, which detracted 7.9 percentage points from GDP. The record fall in household consumption (-12.1%), accounted for over 95% of the fall in GDP.


Source: abs.gov.au

Third-quarter bounce

As COVID-19 related restrictions eased across most states and territories to the exception of Melbourne which is Australia’s the second most-populated and largest city, the Australian economy emerged from a recession and rose 3.3% in September quarter. The GDP figures came above expectations of a 2.5% growth. Given the havoc created by the pandemic, the level of economic activity remains low and GDP has declined by 3.8% in the year to September 2020.


Source: Bloomberg

However, given that Melbourne which was the only state to record a fall driven by declines in household spending and investment has now eased restrictions, policymakers are expecting the economy to continue to grow in the fourth quarter, unlike some other major economies which are still battling a second wave of the outbreak.

Australian share market

After rising at the open, the ASX200 fell into negative territory into lunchtime with most sectors in the red while gains were seen in the materials and industrial sectors. As of writing, the index was trading relatively flat at 6,587.20 points.


Source: Bloomberg Terminal

The Australian dollar

While major currency pairs remained in familiar levels during the Asian session, the Aussie dollar is leading among the G10 currencies against the US dollar on the back of upbeat GDP figures. The additional funding from the central banks, governments, renewed confidence, and economic data have helped the Australian dollar to perform better than its peers.


Source: Bloomberg Terminal

The AUDUSD pair rose to a session high of 0.7389 just below a key psychological level of 0.74 before retreating slightly lower.


Source: GO MT4

Ready to start trading?

The information provided is of general nature only and does not take into account your personal objectives, financial situations or needs. Before acting on any information provided, you should consider whether the information is suitable for you and your personal circumstances and if necessary, seek appropriate professional advice. All opinions, conclusions, forecasts or recommendations are reasonably held at the time of compilation but are subject to change without notice. Past performance is not an indication of future performance. Go Markets Pty Ltd, ABN 85 081 864 039, AFSL 254963 is a CFD issuer, and trading carries significant risks and is not suitable for everyone. You do not own or have any interest in the rights to the underlying assets. You should consider the appropriateness by reviewing our TMD, FSG, PDS and other CFD legal documents to ensure you understand the risks before you invest in CFDs. These documents are available here.

#Indice #Indices #IndicesTrading #IndexTrading #Shares #Stockmarket #Stocks