Australia Leading Index Decreases For A Third Month

Australia Leading Index Actual -1.0%, Previous -0.2%

Release Explanation: This is a composite index used to forecast short to mid-term growth in the Australian economy. Changes in the indicators selected are thought to precede developments in the economy as a whole. Therefore, an increase in the index forecasts economic expansion while a decrease in the index projects a future contraction. The Conference Board of Australia 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 leading index for Australia has decreased 1.0 percent for the month of November, falling to a reading of 114.1. This is the third consecutive decrease for the index. Contributing to the declines seen were building approvals, share prices, yield spreads, and rural goods exports. The coincident index continued to increase in November with the strengths among the components remaining widespread in recent months.

Forex Technical Reaction: The aussie has fallen slightly after this release after oscillating around yesterdays R2 pivot level. The pair is currently trading at .6497

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