Musings from Nomura's Peter....>

AUSTRALIA DATA REACT: Musings from Nomura's Peter Dragicevich; Some

disappointment in the Aust data, with retail sales flat in July (mkt 0.2%), and

the trade surplus coming in at A$460mn (mkt A$1bn). That is the 3rd time in the

past 4 months the trade surplus has come in below consensus. In July, exports

and imports both declined. Aussie has dipped on the data, but the move should

not extend that much, in our view, particularly against the kiwi. Base metal

prices have moved higher over the past couple of months, Chinese growth momentum

is holding up, and market expectations for the RBA have shifted higher (in part

due to signs of improvement across the economy, particularly in the labour

market, and also as a proxy for the rate hikes by the Bank of Canada). By

contrast, headwinds for the kiwi remain (sluggish growth momentum, a cautious

RBNZ, and uncertainty generated by the upcoming general election).