Not a lot of data on the docket, so Asian session forex traders concentrated on pricing in yesterday’s headlines. Here’s what’s up!
- China’s CPI (y/y) up by 1.8% vs. 1.9% expected, 1.7% growth in November
- China’s PPI (y/y) grows by 4.9% vs. 4.8% expected, 5.8% previous
China’s inflation data
A report from China’s National Bureau of Statistics (NBS) showed prices in the world’s second largest economy rising by 1.8% in the year to December. This is higher than the 1.7% growth we saw in November but missed the 1.9% uptick that analysts were expecting.
On a monthly basis, prices had risen by 0.3% following a 0.0% reading in November.
Turns out, the underwhelming price increase was mostly driven by a dip in food prices (-0.4%) from the “pork cycle.” Meanwhile, non-food costs rose by a slower pace (2.4% vs. 2.5% last month).
Some market geeks believe that today’s numbers represent the start of a slowdown in overall price increases after getting fired up in the past couple of months.
Meanwhile, factory gate (read: producer) prices slowed to an annual pace of 4.9% from its 5.8% uptick in November. But while it’s the weakest annual increase since November 2016, December’s numbers are still slightly above the 4.8% growth that analysts had expected.
Mixed equities trading
With no fresh catalysts, Asian session playas decided to take profits on some of their gains.
Nikkei is down by 0.13% to 23,828.50 and Australia’s A SX 200 is down by 0.82% to 6,096.6. Shanghai is up by 0.35% to 3,425.84 and Hang Seng gained 0.68% to 31,223.2, however.
Commodity prices also couldn’t catch a break with gold (-0.15%) and Brent (-0.04%) and U.S. oil prices (-0.02%) lower by the end of mid-day trading.
Major Market Mover(s):
The yen continued to clobber its major counterparts as a lack of fresh catalysts convinced traders to jump on the BOJ tapering rhetoric.
USD/JPY is down by 37 pips (-0.33%) to 112.28;
EUR/JPY is down by 38 pips (-0.28%) to 134.09;
AUD/JPY is down by 25 pips (-0.28%) to 87.87, and
GBP/JPY is down by 57 pips (+0.37%) to 151.96.
Profit-taking from the previous session initially dragged the Greenback lower, but dollar bulls soon went back to party to push the dollar higher before the session ended.
EUR/USD rose to a high of 1.1950 before dipping back to 1.1942;
GBP/USD hit 1.3542 before it slipped to 1.3533;
USD/CHF dipped to .9827 before shooting back up to .9834, and
USD/CAD recovered from 1.2455 to trade at 1.2461.
Watch Out For:
- 7:45 am GMT: France’s industrial production (-0.4% expected 1.9% previous)
- 9:30 am GMT: U.K.’s manufacturing production (0.3% expected, 0.1% previous)
- 9:30 am GMT: U.K.’s goods trade balance (-10.9B GBP expected, -10.8 GBP previous)
- 9:30 am GMT: U.K.’s construction output (0.7% expected, -1.7% previous)