Trade Desk Thoughts - Australia WMI Leading Index (July)

Actual 0.1%, Previous 0.0%

Release Explanation: The release considers eight indicators in the calculation of the index: money supply, share prices, rural goods exports, building approvals, sales to inventories ratio, gross operating surplus, yield spread, and medium-term government bond yields. The index is calculated as a percent change off a base year; headlines report the figure in a percent change from the previous month.

Trade Desk Thoughts: The index is seeing the lowest rate of growth since 2001. The fall in equity prices, weak home loan approvals as well as weak U.S. industrial production have helped to reduce the leading index growth estimate. The Australian dollar is also highly correlated to raw material prices because shipment of these materials to overseas countries account for about 17 percent of the economy.

Forex Technical Reaction: The aussie strengthened slightly before the release but has since fallen back .8725.

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