Derek Halpenny, European Head of GMR at MUFG, notes that the Australian real GDP expanded by a stronger than expected 0.6% Q/Q in Q4, resulting in a 3.0% annual gain – impressive figures given the commodity price crash and general global financial market conditions. Key Quotes “It was the consumer that drove growth with the household savings rate falling to the lowest level since 2008. Again, evidence from a major developed economy of the benefits from falling crude oil prices. The data certainly backs up the stance of the RBA to refrain from monetary easing. There is also reason for some further optimism given the price of iron, which has now jumped 30% from its 2016 low, points to an easing of the drag coming from the terms of trade shock. Short-term yields have surged today with the 2-year bond yield up 12bps. We did flatten our AUD/USD forecast profile in our March monthly yesterday and today’s data will provide additional support for AUD/USD.” For more information, read our latest forex news.