Local stocks rose higher today, buoyed by positive leads from Wall Street and a stronger than expected quarterly growth figure.
ABS figures today showed the economy grew by a solid 1.3% in the three months to March, a figure double the most optimistic forecasts.
At 3.30pm today the ASX had risen 0.2% to 4051.8, while the broader All Ordinaries index gained 0.23% to 4102.0.
Senior trader at CMC Markets Tim Waterer described the result as “a bolt from the blue”.
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“GDP serves as an economic health check and the Australian economy passed with flying colours. Against this expansionary backdrop it is difficult to envision the RBA ‘staying the course’ on the current rate cutting cycle. The GDP result combined with a stabilisation of events in Europe could see the RBA in ‘pause mode’ for several months on rates. The fear of overshooting to the downside becomes a realistic event if the economy can achieve anywhere near this pace of growth over the next two quarters.”
The Australian dollar rose on the news, buying 98.45 US cents.