ASX200 edges higher ahead of Wednesday AU Q2 GDP release

Wednesday sees the release of Australia's Q2 GDP report at 11.30 am. The report predates current lockdowns in Sydney and Victoria, and because of this, the data is less valuable than usual.

Stocks (2)

Nonetheless, the release is expected to garner serious media attention locally because a heavy contraction in GDP in Q3 is already guaranteed due to lockdowns.

Should Wednesdays Q2 data also show a contraction, it will mean the Australian economy will fulfil the technical definition of a recession for the second time in two years; two consecutive quarters of negative GDP. 

This morning saw the release of some key inputs into Wednesday's GDP data. Q2 Company Profits were much stronger than expected (+7.1% vs. 2.5% exp), driven by strong commodity prices lifting mining profits. Partly offset by a further step-down in government subsidies in the quarter. 

However, Q2 Inventories rose less than expected (0.2% vs. 1.2% exp), bringing into question the strength of the rebuild following a sharp rundown in 2020 that will likely subtract from quarterly growth. 

The final partials drop tomorrow morning in the shape of Balance of Payments data, expected to show Net Exports fell in real terms, driven by a decline in export volumes that may subtract as much as 1.5ppt off GDP growth. 

For the record, the range of Q2 GDP estimates is from -0.1% to a more optimistic +1%. The wide range reflects the many moving parts that go into GDP, Australia's average expenditure, incoming, and production estimates. 

Turning to the charts, after falling from its 7632.8 high of Mid-August, the recovery from the 7429 low is viewed as the incomplete second leg (Wave b) of a three-wave corrective sequence. A break below the 7429 low would indicate that the third leg lower (Wave c) is underway towards trend channel support near 7320/00, which remains our preferred buying level. 

ASX200 Daily Chart

 Source Tradingview. The figures stated areas of August 30th, 2021. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

More from ASX


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.