Asian Session Forex Recap – Oct. 21, 2014

  • Chinese economy expanded by 7.3% in Q3 2014 vs. 7.2% forecast
  • China’s industrial production up by 8.0% y/y in Sept vs. 7.5% estimate
  • Chinese fixed asset investment fell from 16.5% y/y to 16.1% in Sept
  • Chinese retail sales picked up by 11.6% y/y vs. 11.8% forecast
  • RBA minutes: Prudent to maintain period of stability in interest rates
  • New Zealand credit card spending increased by an annualized 4.4% in Sept
  • Swiss trade balance and U.K. public sector net borrowing data due

And the numbers from China are in! Most of the figures came close to expectations, with the Q3 GDP reading showing 7.3% quarterly growth versus the 7.2% forecast. Industrial production was better than expected at an 8.0% annualized gain in September, higher than the projected 7.5% increase. Retail sales was slightly weaker than expected at an 11.6% year-over-year rise versus the estimated 11.8% growth while fixed asset investment weakened to 16.5% in September.

The RBA minutes contained no surprises, as policymakers simply reiterated that monetary policy is appropriate for the time being and that the prudent course would be to maintain a period of stability in interest rates. Apart from that, Governor Stevens also emphasized that the Australian dollar remains high by historical standards. Nothing new, really.

AUD/USD popped higher after the release, testing the .8800 handle with a 0.23% gain so far. AUD/JPY surged to the 94.00 handle, up 0.06% as of this writing. NZD/USD is also slightly higher with a 0.07% gain after the Chinese data dump. Credit card spending in New Zealand picked up by 4.4% in September from a year ago, stronger than the previous month’s 4.2% figure.

EUR/USD is up 0.03% and is testing the 1.2800 handle, GBP/USD is creeping higher with a 0.01% gain at the 1.6165 area, and USD/CHF is flat at .9423 so far. USD/JPY has logged in a 0.19% decline at the 106.75 levels while EUR/JPY is also edging lower with a 22-pip forex loss.

Up ahead, the forex calendar indicates that only a couple of medium-tier data points are due, namely the U.K. public sector net borrowing report and the Swiss trade balance. Switzerland’s trade surplus is projected to have widened from 1.33 billion CHF to 2.43 billion CHF in September, which might be a sign of improving export activity. Meanwhile, the U.K. public deficit is expected to have fallen from 10.9 billion GBP to 9.3 billion GBP in September, indicating improving government finances. Stronger than expected data could keep risk aversion at bay, which might allow higher-yielders to extend their gains.

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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