It was a mixed week for Asian session forex players, as traders reverse some of yesterday’s moves while weak Chinese data limited risk-taking.
- AU NAB business confidence improves from 6 to 7 in July
- China’s fixed asset investment (ytd/y) up by 5.5% vs. 6.0% expected and previous
- China’s industrial production rises by 6.0% vs. 6.3% growth expected, 6.0% previous
- China’s retail sales (y/y) jumps by 8.8% vs. 9.2% expected, 9.0% previous
- China’s unemployment rate pops up from 4.8% to 5.1% in July
- Japan’s revised industrial production down to -1.8% vs. -2.1% expected and previous
China’s data dump
Reports printed earlier showed the world’s second largest economy cooling faster than analysts had expected in July.
China’s fixed asset investment growth, for example, only grew by 5.5% from January to July and marked its weakest growth on record.
Details reveal that private sector investment (which makes up 60% of overall investment in China) had risen by 8.8% against the 8.4% improvement seen in the first half of the year.
Annualized retail sales also softened, only growing by 8.8% from a year ago when many had seen a 9.2% jump. Meanwhile, industrial production maintained its 6.0% growth but missed expectations of a 6.3% uptick.
It’s still difficult to point if the weaknesses came from China’s trade row with the U.S. or just softer domestic conditions but market players know that today’s releases certainly don’t inspire confidence for the economy’s short-term prospects.
Mixed risk sentiment
A bit of profit-taking from yesterday’s selloff and Turkey’s central bank revising its reserve requirement ratios helped a bit in keeping the Asian markets calm today.
China’s bourses were immune to the good vibes, however, thanks to today’s disappointing reports printing a gray picture for the economy.
- Nikkei is up by 1.79% to 22,248.3
- A SX 200 is up by 0.62% to 6,292.4
- Shanghai index is down by 0.50% to 2,771.806
- Hang Seng is down by 0.89% to 27,687.0
Commodities weren’t any better in moving in one direction. Gold inched higher after seeing losses yesterday, while crude oil prices were all over the place as traders priced in lower global oil demand and Saudi Arabia reporting lower production for the month of July.
- Gold is up by 0.14% to $1,195.04
- Brent crude oil is down by 0.01% to $72.79
- U.S. WTI is up by 0.12% to $67.46
Major Market Mover(s):
The low-yielding yen took some hits on some traders taking a bit more risk compared to the previous sessions.
USD/JPY is up by 14 pips (+0.13%) to 110.85; EUR/JPY is up by 16 pips (+0.12%) to 126.46; GBP/JPY is up by 25 pips (+0.17%) to 141.54; AUD/JPY is up by 16 pips (+0.20%) to 80.64, and AUD/CHF is up by 12 pips (+0.16%) to .7232.
Reports of Saudi Arabia cutting its oil production as well as a bit of risk-taking in the markets helped propel the Canadian dollar higher.
USD/CAD is down by 18 pips (-0.14%) to 1.3116; CAD/JPY is up by 24 pips (+0.28%) to 84.52; EUR/CAD is down by 24 pips (-0.15%) to 1.4962; GBP/CAD is down by 24 pips (-0.14%) to 1.6746, and CAD/CHF is up by 19 pips (+0.25%) to .7580.
The Kiwi had been taking heavy hits lately, so it’s no surprise that a risk-friendly trading environment encouraged some bargain-hunting among forex traders.
NZD/USD is up by 23 pips (+0.35%) to .6602; NZD/JPY is up by 37 pips (+0.50%) to 73.19; NZD/CHF is up by 31 pips (+0.47%) to .6564; AUD/NZD is down by 31 pips (-0.28%) to 1.1017, and GBP/NZD is down by 68 pips (-0.35%) to 1.9337.
Watch Out For:
- 6:00 am GMT: Germany’s preliminary GDP (q/q) (0.4% expected, 0.3% previous)
- 6:00 am GMT: Germany’s final CPI to remain at 0.3?
- 6:45 am GMT: France’s final CPI to remain at -0.1%?
- 7:15 am GMT: Switzerland’s PPI (0.3% expected, 0.2% previous)
- 8:30 am GMT: U.K.’s employment numbers. Take time to read our mini trading guide before you trade the event!
- 9:00 am GMT: Euro Zone’s flash GDP (q/q) expected to maintain 0.3% growth
- 9:00 am GMT: Germany’s ZEW economic sentiment (-20.1 expected, -24.7 previous)
- 9:00 am GMT: Euro Zone’s industrial production (-0.3% expected, 1.3% previous
- 9:00 am GMT: Euro Zone’s ZEW economic sentiment (-16.4 expected, -18.7 previous)