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Traders mostly shrugged off China’s mixed economic reports in favor of pricing in several risk-friendly market headlines.

  • Business NZ manufacturing index improves from 51.2 to 52.0
  • China’s industrial production (y/y) faster from 6.0% to 6.1% in August
  • China’s fixed asset investment (ytd/y) dips from 5.5% to 5.3%
  • China’s retail sales (y/y) jumps from 8.8% to 9.0% in August
  • Japan’s industrial production revised lower from -0.1% to -0.2% in July

Major Events/Reports:

China’s data dump

Data from the world’s second largest economy showed mixed results.

China’s real estate investment moderated in August, which raised concerns that a cooling property market wouldn’t help if/when the U.S.-China trade war takes its toll on the economy.

Fixed asset investment – considered an early signal of economic activity – also slowed to a record low growth in August. While China has already taken measures to boost public and private spending, analysts believe that it will take months before we see their effects.

Industrial production fared a bit better with its 6.1% growth from a year earlier, while retail sales beat market expectations by clocking in a 9.0% growth for the month.

The real estate numbers got the most attention from market players today, though a lot of traders chose to keep their eyes on updates on the U.S.-China trade war.

Cautious risk-taking

It seems like Asian session traders were in the mood to focus on the bright spots in the markets today.

For starters, China’s mixed data releases; Trump tempering expectations over the U.S.-China trade negotiations, and a commentary from state-owned China Daily saying that China “will not hesitate to take countermeasures” took a backseat to optimism over Washington’s invitation to at least talk trade.

Meanwhile, emerging market concerns became a teeny tiny bit less concerning after Turkey’s central bank aggressively raised its rates to combat the country’s inflation.

  • Nikkei is up by 0.93% to 23,033.2
  • A SX 200 is up by 0.19% to 6,170.2
  • Shanghai index is down by 0.13% to 2,683.031
  • Hang Seng is up by 0.81% to 27,232.5

Commodity prices were a little more mixed, with gold prices taking advantage of a dip in dollar demand while oil benchmarks took more hits on global demand concerns.

  • Gold is up by 0.32% to $1,205.20 per troy ounce
  • Brent crude oil is down by 0.20% to $78.25 per barrel
  • U.S. WTI is down by 0.04% to $68.75

Major Market Mover(s):

NZD

Whether it’s risk-taking or profit-taking from losses earlier this week, the high-yielding Kiwi was the biggest winner during the Asian session.

NZD/USD is up by 15 pips (+0.22%) to .6583; NZD/JPY is up by 13 pips (+0.18%) to 73.62; EUR/NZD is down by 29 pips (-0.16%) to 1.7759; GBP/NZD is down by 23 pips (-0.11%) to 1.9919, and AUD/NZD is down by 14 pips (-0.13%) to 1.0924.

GBP

The pound extended its win against its major counterparts as traders continued to price in Brexit-related optimism and the BOE retaining its hawkish bias.

GBP/USD is up by 9 pips (+0.07%) to 1.3114; EUR/GBP is down by 4 pips (-0.04%) to .8916; GBP/AUD is up by 17 pips (+0.09%) to 1.8234, and GBP/CAD is up by 6 pips (+0.04%) to 1.7041.

Watch Out For:

  • 9:00 am GMT: Euro Zone’s trade balance (16.3B EUR expected, 16.7B EUR previous)
  • 10:00 am GMT: BOE Governor Carney to give a speech in Dublin
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