A late weekend article from the Wall Street Journal paints a bleak picture for Australia. It starts off talking about Geelong, a manufacuring city in Australia’ south east: Ford has announced its closing, Shell want to sell its refinery there. a major retail chain support center in the city is closing , shedding 260 jobs.
The article quotes:
- Goldman Sachs GS -1.75% said last week there was a one-in-five chance that Australia could tip into recession in the coming year
- Saul Eslake, Australia chief economist at Bank of America Merrill Lynch, also recently warned of the risk of recession
- “The risk of recession is significant,” said Shane Oliver, Sydney-based chief economist at AMP Capital Investors, one of Australia’s biggest fund managers
On the bright side:
- economists think Australia has headroom to avoid a recession, but worry this may be narrowing
- “I think warning of recession is too much, but there is clearly going to be a pretty significant slowing,” said Alan Oster, Melbourne-based chief economist at National Australia Bank
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When you put together the poor China headlines and articles like this over the weekend, its a wonder the AUD isn’t lower this morning. It had a bit of a gap down on the opne in New Zealand but has since recovered the gap is currently 009568/71.
Bit of resistance around 0.9570/80, some support coming in 0.9510/20
