Article Highlights

  • China’s Q1 2014 GDP as expected at 7.0%, previous reading at 7.3%
  • Chinese March industrial production up by 5.6% y/y, short of 6.9% forecast
  • Chinese March retail sales up by 10.2% y/y, lower than 10.9% estimate
  • China’s fixed asset investment up by 13.5% ytd, weaker than 13.8% forecast
  • Australia Westpac consumer sentiment down by 3.2% in April
  • ECB interest rate statement coming up
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Forex market participants focused on China’s data dump in today’s Asian trading session, causing risk appetite to take a hit. Although the Q1 2014 GDP reading came in line with expectations of 7.0% growth, other economic figures fell short of expectations.

Chinese industrial production showed a mere 5.6% annualized increase for March versus the projected 6.9% gain while retail sales posted a 10.2% rise year-over-year instead of the estimated 10.9% increase. Fixed asset investment was also subpar, as the reading missed the 13.8% forecast and came in at 13.5%.

With that, the Australian dollar tumbled against its forex counterparts, as the slowdown in China could spell weaker demand for its commodity exports. AUD/USD is down 30 pips (-0.40%) and is breaking below the .7600 handle while AUD/JPY is lower by 18 pips (-0.20%). It didn’t help that Australia’s Westpac consumer sentiment reading showed a 3.2% decline for April, following the 1.2% drop in March.

Other commodity currencies such as the Loonie and Kiwi managed to stay afloat, with NZD/USD up by 13 pips (+0.17%) and USD/CAD testing support at the 1.2450 minor psychological level.

ECB Governor Draghi is set to steal the spotlight in the upcoming London trading session, as their monetary policy statement is coming up. No actual changes are expected since the ECB’s massive QE program is already rolling along but market watchers are likely to pay close attention to any potential changes in rhetoric. Bear in mind that Draghi has been highlighting the recent positive developments in the region and might continue to emphasize that a sustained recovery is taking hold. Better watch this event closely if you’re trading the euro today!

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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