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Holding Above Recent Lows


BLOCK, Large 3Y Midcurve Put Condor

By Sophia Rodrigues
     SYDNEY (MNI) - The Australian Bureau of Statistics published the Q1 GDP
data Wednesday. Below are the five key observations we made:
     --GDP grew 1.0% q/q and 3.1% y/y, beating MNI median forecast for 0.85% q/q
and 2.8% y/y growth. There was upward revision to Q4 growth to +0.5% from +0.4%
originally reported. The outcome is likely to be in line with the Reserve Bank
of Australia forecast and supports their view that pick up in growth should see
some reduction in spare capacity in the economy.
     --While the headline number was better than expected, the details related
to households were weak. Household consumption rose 0.5% q/q, lower than
expected by economists and made just 0.2 point contribution to GDP. The last
time household consumption made such a low contribution to GDP was in Q1 last
year. Average earnings per worker (non-farm) rose 0.5% q/q, following a slight
upward revision to Q4 flat outcome (to +0.1%), but y/y slowed to 1.6% y/y from
+1.8% in Q4).
     --Households savings ratio fell to 2.1% in Q1 from 2.3% in Q2, the lowest
rate in several years, and points to continued spending by households out of
their savings, rather than income.
     --Nominal GDP in Q1 rose by a solid 2.2% q/q but y/y slowed to 3.9% from
3.5% in Q4 and 5.9% in Q3. Compensation per employee rose 1.2% q/q and average
compensation per employee rose 0.5% q/q after a flat Q4.
     --Net export made a 0.4 percentage point contribution to Q1 GDP, slightly
higher than 0.3 point indicated in the Balance of Payments data published on
--MNI Sydney Bureau; tel: +61 2-9716-5467; email:
[TOPICS: M$A$$$,M$L$$$,MT$$$$]