Westpac write that today's AU GDP.........>

AUSTRALIA: Westpac write that today's AU GDP "result will come as a

disappointment to the RBA. Note that the Bank's forecast for GDP growth in 2018

for which appeared in the Nov SoMP was 3.5%. With the first three quarters of

the year totalling 2.2% the December quarter would have to print growth of 1.3%

(a 5.2% annualised growth pace) - a highly unlikely event. We can expect the

Bank to lower its forecast for GDP growth in 2018 from 3.5% to 3.0% when it next

releases its forecasts on February 9 2019. That forecast will then challenge the

2019 forecast of 3.25% which appeared in the November Statement. It was

reasonable for the Bank to assume some slowing between 2018 and 2019 (Westpac's

growth forecast for 2019 has been 2.7%) particularly with a more clouded outlook

for global growth and a likely accelerated contraction in residential

investment. (Note new dwellings contracted by 0.8% in The September quarter

following two quarters which averaged 3.2% in March and June). That would

immediately push the likely 2019 forecast back to around Westpac's forecast of

2.7%. So, this print is likely to change the Bank's growth rhetoric of strongly

above trend to slightly above trend drifting back to trend in 2019."