Asia Market News: Aussie Dollar and ASX 200 Down on Q4 GDP Numbers

Australian Economy Expanded by 0.2% in Q4 2023

On Wednesday, the Australian economy was under the spotlight. The economy expanded by 0.2% quarter-on-quarter in Q4 after growing by 0.3% in Q3.

According to the ABS,

• Government spending increased by 0.6%, with private business investment up 0.7% in Q4.
• Trade also contributed, with goods and services imports down 2.8% and 5.3%, respectively. In contrast, exports of goods fell by 0.3% quarter-on-quarter, while the export of services increased by 0.5%.
• Significantly, household spending increased by only 0.1%. Households spent more on essential items while scaling back spending on discretionary items.
• Employee compensation increased by 1.4% in Q4, while the household saving ratio increased to 3.2%

AUD/USD Reacts to Australian GDP Numbers

Before the GDP numbers from Australia, the AUD/USD rose to a high of $0.65072 before falling to a low of $0.64950.

In response to the GDP report, the Aussie dollar rose to a high of $0.64984 before falling to a low of $0.64925.

On Wednesday morning, the Aussie dollar was down 0.06% to $0.65002.

Asian Equity Markets: Hang Seng Index Avoids Morning Sell-Off

On Wednesday, the ASX 200 spent the morning session in negative territory. The ASX 200 was down 0.29%. Mining stocks sent the ASX 200 into the red, with BHP Group Ltd (BHP) and Rio Tinto Ltd. (RIO) seeing losses of 0.90% and 1.37%, respectively. Uncertainty about demand, stemming from the lack of a stimulus package from the National People’s Congress, pressured iron ore prices.

However, Gold (XAU/USD) stocks had a mixed morning despite gold spot making overnight gains. Northern Star Resources Ltd. (NST) was up 0.64%, while Evolution Mining Ltd. declined by 0.62%.

In contrast, the Hang Seng Index was up 0.73%. Tech stocks steadied after seeing heavy losses on Tuesday. The Hang Seng Tech Index (HSTECH) gained 1.37%, with Alibaba (9988) up 1.58%.

Wage Negotiations, Inflation, and Services Pave the Way to a BoJ Pivot

On Wednesday, the USD/JPY was down 0.05% to 149.963. Bets on a Bank of Japan pivot from negative rates pressured the USD/JPY.

Positive updates on wage negotiations, hotter-than-expected inflation numbers for Tokyo, and the Services PMI raised bets on the Bank of Japan exiting negative rates in April. According to the Jibun Bank Japan Services PMI survey, prices increased at the most marked pace since August 2023.

Investors also reacted to weaker-than-expected US Services PMI numbers from Tuesday.