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Weak data releases ain’t got nothin’ on risk appetite! The bulls came out to play and dragged the safe-haven yen lower across the board as they bought up higher-yielding currencies.

  • Japan’s banks out on Marine Day holiday
  • U.K.’s Rightmove house price index slips by 0.1% vs. 0.4% gain in June
  • China’s GDP up by 6.7% vs. 6.8% growth in Q1 2018
  • China’s fixed asset investment grows by 6.0% as expected vs. 6.1% uptick in May
  • China’s industrial production (y/y) up by 6.0% vs. 6.5% expected, 6.8% previous
  • China’s retail sales (y/y) shoots up by 9.0% vs. 8.8% expected, 8.5% previous
  • China’s unemployment rate stayed at 4.8% in June

Major Events/Reports:

China’s data dump

Reports printed earlier showed the world’s second largest economy growing at a slower pace in Q2 2018.

China’s GDP came in at 6.7%, which marks the weakest growth since Q3 2016 but is right along what analysts had expected. This is also mostly in line with the Chinese government’s 6.5% target for the year.

Turns out, growth took a step back as authorities took financial deleveraging measures to contain debt that posed risks for the economy’s growth.

Meanwhile, industrial production came in at 6.0% from a year earlier in June, which marks the weakest growth since March. A closer look tells us that production increased at a slower pace for ALL sectors.

China’s fixed-asset investment growth also disappointed, coming in at 6.0% – its record low for the first half of the year in June.

However, private sector investment – which makes up 60% of overall investment in China – rose by 8.4% in H1 2018 against an increase of 8.1% in the first five months of the year.

We don’t have far to look for the cause of these weaknesses! Aside from the government’s efforts at financial deleveraging, investors are also staying away from big ticket investments as the U.S.-China trade war narrative heated up.

Mixed risk sentiment

A weak yen boosted Nikkei in the first trading day of the week, while trade war concerns and lackluster Chinese data kept the bulls at bay for the other Asian bourses.

  • Nikkei is up by 1.85% to 22,597.3
  • A SX 200 is down by 0.36% to 6,246.2
  • Hang Seng is down by 0.19% to 28469.8
  • Shanghai index is down by 0.52% to 2,816.471

Commodity prices caught the risk appetite train, however.

  • Gold is up by 0.23% to $1,244.12
  • Brent crude oil is up by 0.03% to $74.84
  • U.S. WTI is up by 0.11% to $70.57

Major Market Mover(s):

JPY

The low-yielding yen extended its losses from the previous week and was the biggest mover during the trading session.

USD/JPY is up by 13 pips (+0.12%) to 112.46; EUR/JPY is up by 20 pips (+0.16%) to 131.47; GBP/JPY is up by 30 pips (+0.20%) to 148.94, and CHF/JPY is up by 19 pips (+0.17%) to 112.32.

AUD/JPY is up by 14 pips (+0.17%) to 83.52; CAD/JPY is up by 18 pips (+0.20%) to 85.55, and NZD/JPY is up by 21 pips (+0.27%) to 76.20.

NZD

There were no fresh catalysts to boost the Kiwi, but the comdoll – which took heavy hits last week – could be seeing buyers at the start of the week.

NZD/USD is up by 10 pips (+0.15%) to .6775; AUD/NZD is down by 7 pips (-0.07%) to 1.0959; GBP/NZD is down by 8 pips (-0.04%) to 1.9543, and NZD/CHF is up by 7 pips (+0.11%) to .6784.

Watch Out For:

  • 9:00 am GMT: Italy’s trade balance (3.25B EUR expected, 2.94B EUR previous)
  • 10:00 am GMT: Euro Zone’s trade balance (17.6B EUR expected 18.1B EUR previous)