Aus macro/Aus GDP

Lot of negatives in that Aus GDP quarterly contributions print. It might have hit consensus, but looks very weak to me.

And, I would say, it sure seems to be trending lower and lower, looking to that real GDP figure (second row, first column). Not hard to imagine why, with mortgage rates hitting ~7%…

Also not hard to imagine GFCF – dwellings taking at least a further 50bps off GDP given the outlook, over time.

It is tough out there, builders going bust, building approvals in the toilet (a saying meant to indicate the degree of weakness).

“Aspirational” housing targets are just that, in absence of a powerful new catalyst.

Supports our UW to Australian shares, at the DAA level, and our preference for Aussie government bonds.

Also note the productivity data; it suggests “more people are employed” than is perhaps optimal; hours worked has increased enormously, much faster than GDP, and hence output per labour hour has fallen, a lot.

The saving ratio also ticked up a notch, supporting the idea of consumers knuckling down in the face of higher rates.

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