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Major currencies were all over the place as forex traders priced in mixed risk sentiment ahead of a potentially volatile week.

  • 9:00 am GMT: Euro Zone final core CPI (y/y) expected to remain at 1.1%
  • China’s GDP (q/y) retains 6.9% growth vs. 6.8% expected
  • China’s industrial production (y/y) up by 7.6% vs. 6.5% expected, previous
  • China’s fixed asset investment (ytd/y) up by 8.6% vs. 8.5% expected, 8.6% previous
  • China’s retail sales (y/y) up by 11.0% vs. 10.6% expected, 10.7% previous
  • Xi Jinping creates cabinet-level committee for financial oversight

Major Events/Reports:

China’s data dump

The world’s second largest economy saw a 6.9% growth from a year earlier in Q2 2017 as industrial output and consumption rose while investment retained its strength.

Q2’s growth matched Q1 2017’s figure against analysts’ expectations of a 6.8% uptick. On a quarterly basis, this translates to a 1.7% uptick, up from Q1 2017’s 1.3% increase.

In other news releases, we found out that factory output had grown by 7.6% from a year earlier in June – the fastest pace in three months – while fixed asset investment is up by 8.6% so far this year.

Last but not the least, retail sales shot up by 11.0% – the fastest since December 2015 – against expectations of a 10.6% increase.

For newbies out there, you should know that the Chinese government is officially aiming for a 6.5% growth this year, a tad lower than its 6.7% target last year.

More regulations in China?

As good as China’s reports are, though, more market players are worried that the Chinese government’s efforts to curb financial risk would rain on the GDP’s parade in the second half of the year.

In a closed-door conference that happens once every five years, President Xi Jinping announced the creation of a cabinet-level committee that would coordinate financial oversight, which is currently divided among four regulators including the PBoC.

The prospect of more regulations weighed on Chinese equities for a bit and added to concerns of rising debt, overcapacity in the manufacturing and property sectors. Overall, these factors are expected to weigh on the economy’s growth prospects for the rest of the year.

Mixed risk sentiment

Liquidity was pretty tight today especially with Japan’s markets out on a holiday.

Strong Chinese data boosted risk sentiment for a while before profit-taking on last Friday’s dollar selloff and concerns over China’s growth for the rest of the year eventually pushed the dollar higher across the board.

Nikkei is up by 0.09%, the Shanghai index stemmed its losses to only 0.11%, Hang Seng is now up by 0.63%, and Australia’s A SX 200 is up by 0.07%.

Meanwhile oil prices recovered with Brent crude rising by 0.3% to $49.03 while U.S. crude oil prices also rose by 0.2% to $46.64 per barrel.

Major Market Mover(s):

USD

The dollar gained back some of its losses after taking hits in late Friday trading.

EUR/USD is down by 9 pips (-0.08%) to 1.1464, USD/JPY is up by 13 pips (+0.12%) to 112.60, and USD/CHF is up by 11 pips (+0.11%) to .9644.

AUD

The commodity-related currency started the day on the wrong side of the charts despite some promising reports from China.

AUD/USD is down by 16 pips (-0.20%) to .7812, AUD/JPY is down by 7 pips (-0.08%) to 87.96, and GBP/AUD is up by 36 pips (+0.22%) to 1.6772.

Watch Out For:

  • 9:00 am GMT: Euro Zone final CPI (y/y) expected to remain at 1.3%
  • 9:00 am GMT: Euro Zone final core CPI (y/y) expected to remain at 1.1%