- Japanese core machinery orders down by 1.7% vs. estimated 3.9% drop
- Producer prices in Japan up by 0.5% in Feb as expected
- Australia’s Westpac consumer sentiment down by 1.2% this month
- Chinese industrial production down from 7.9% to 6.8% in Feb
- Retail sales in China tumbled from January’s 11.9% annual gain to 10.7% in Feb
- Chinese steel output to fall in 2015, according to top industry group
- ECB Governor Draghi and BOE MPC member Weale set to give speeches
China hogged the spotlight in today’s Asian trading session as forex traders got a glimpse of the country’s retail sales and industrial production reports. All the figures came in the red as retail sales posted a mere 10.7% annualized gain versus the projected 11.6% increase and the previous 11.9% reading. Industrial production slumped from 7.9% to 6.8%, worse than the estimated drop to 7.7% in February.
While folks on the internet have been buzzing about the return of Zoolander’s trademark “Blue Steel” look on the runway, most forex market watchers have turned their attention to forecasts of a fall in steel output from China. According to The China Iron and Steel Association, consumption has already peaked and that more production mills are about to be shut down, fueling speculations that the world’s second largest economy is indeed facing a slowdown.
The Aussie has been dragged lower by these downbeat reports, with AUD/USD looking at a 30-pip loss (-0.38%) so far and AUD/JPY lower by 10 pips (-0.10%). The Australian currency is lower against the euro and the pound, with EUR/AUD holding on to a 32-pip gain (+0.23%) and GBP/AUD enjoying a 78-pip gain (+0.39%). It didn’t help that Australia saw a 1.2% decline in its Westpac consumer sentiment report, indicating a slump in confidence.
Yesterday’s reports on contamination threats for Fonterra have weighed on the company’s order volumes, leading to more Kiwi weakness in the past few hours. NZD/USD has fallen 29 pips (-0.4%) and is testing support at the .7250 minor psychological level.
In Japan, core machinery orders showed a 1.7% annualized decline for January, better than the projected 3.9% drop. Producer prices showed a 0.5% uptick for February, as expected. USD/JPY bounced off support at the 121.00 major psychological level early on in the session and is up 33 pips (+0.28%) as of this writing.
Pound pairs could steal the show and make a few good moves in the upcoming London trading session, as the U.K. is set to print its manufacturing production report for January. Forex market analysts are expecting to see a 0.2% uptick for the month, slightly higher than the previous 0.1% gain. Do stay on your toes for interesting remarks from ECB Governor Draghi who is set to give a speech at 9:00 am GMT and from BOE MPC member Weale who would take the mic at 4:00 pm GMT.
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