FXStreet reports that ahead of Wednesday’s Australian Q2 GDP release, analysts at Citigroup warn about a potential return of a technical recession for the economy amid ongoing lockdowns due to the rapid spread of the Delta variant.

“Australia’s economy may have shrunk slightly in the three months through June, setting up the bad “optics” of a technical recession when combined with the lockdown-induced contraction expected for the current quarter.”

"Net exports are expected to out-weigh all positive domestic growth drivers including household consumption, government demand, business investment” and others.”

“The optics of such a result would be poor.”

"Sydney is now in its 10th week of lockdown and Melbourne and national capital Canberra are also under stay-at-home orders."