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Forex trading volatility was muted for the major currencies except for the Aussie, which was sent all over the charts by Australia’s jobs numbers and China’s data dump.

  • U.K. RICS house price balance clocks in at -107.7B vs. -118.6B expected, -42.9B previous
  • AU MI inflation expectations dips from 4.2% to 3.8% in August
  • AU adds net of 54.2K jobs vs. 20.0K expected, 29.3K previous
  • AU unemployment rate remains at 5.6% as expected
  • China’s industrial production (y/y) climbs by 6.0% vs. 6.6% expected, 6.4% previous
  • China’s industrial production (y/y) climbs by 6.0% vs. 6.6% expected, 6.4% previous
  • China’s fixed asset investment (ytd/y) up by 7.8% vs. 8.2% expected, 8.3% previous
  • China’s foreign direct investment (ytd/y) improves from -1.2% to -0.2% in August
  • China’s foreign direct investment (ytd/y) improves from -1.2% to -0.2% in August
  • USD-trading muted ahead of today’s CPI release

Major Events/Reports:

Upside surprise for Australia’s jobs report

A few hours ago the Land Down Under printed labour market numbers that are WAY better than market players had expected.

Australia added a net of 54,200 jobs in August, marking the biggest jump since October 2015 and the 11th straight month of job gains. That’s the longest streak in 23 years, yo! July’s

Even the details look rosy. A net of 40,100 workers found full-time jobs while 14,100 labourers found part-time positions. And in line with the strong rise in full-time employment, Australia’s Bureau of Statistics (ABS) shared that the seasonally adjusted hours worked for all jobs edged 0.4% higher.

The improving labour market is likely why the participation rate jumped from 65.1% to 65.3%, its highest since September 2012. The increase in workers looking for jobs balanced out the additional job opportunities, which is why unemployment rate remained at 5.6% as expected.

Still, not everyone is impressed. The quarterly trend of underemployment rate – which measures those who would like to work more hours – remained at a historical high of 8.7% in the three months to August. So while more blokes and sheilas are getting jobs, it also doesn’t look like they will translate to higher wages (and therefore higher consumer confidence and inflation) anytime soon.

China’s data releases disappoint

Data from the world’s second largest economy saw weaker growth for retail sales and industrial production for the month of August.

Retail sales increased by another 10.1% from a year earlier in August, which is lower than the expected 10.5% reading and marks the slowest growth since February.

Industrial production isn’t much better with its 6.0% uptick when market players were expecting a 6.6% growth from a year earlier. It marked the weakest gain since December 2016, as output slowed for electricity, gas, and water production as well as mining.

Last but not the least is fixed asset investment, which clocked in its slowest growth since 1999. Yipes! The report showed a 7.8% from January to August after rising by 8.3% in the first seven months of the year.

Details tell us that a slowdown in infrastructure investment was the main culprit, which also ended up weighing on industrial production.

Overall the numbers support investors’ concerns that the government’s tighter monetary policies as well as its crackdown on financial risks for China’s companies would soon drag on investment growth.

Caution ahead of today’s top-tier events

The Asian bourses started the day strong thanks to Trump’s tax reform talks pushing Dow, S&P 500, and NASDAQ to their record highs yesterday.

Risk sentiment took a turn, however, as Asian session traders priced in China’s weak data and took profits ahead of the BOE and SNB’s policy decisions as well as Uncle Sam’s inflation event.

  • Nikkei dipped by 0.23% to 19,821.00;
  • Australia’s A SX 200 fell by 0.16% to 5,734.90;
  • Hang Seng dropped by 0.47% to 27,762.50, and
  • Shanghai index dipped by 0.17% to 3,378.56.

Commodities did’t fare much better either.

  • Gold is down by 0.14% to $1,326.18;
  • Brent crude oil is down by another 0.29% to $55.00, and
  • U.S. crude oil is down by 0.14% to $49.23.

Major Market Mover(s):

AUD

The Aussie got a boost from the ridiculously good jobs numbers, but was soon weighed down by not-as-stellar data releases from China.

AUD/USD jumped to .8016 before settling down to .8004 (+0.28%);
AUD/JPY is up by 15 pips (+0.17%) to 88.45after hitting a high of 88.74;
EUR/AUD is down by 51 pips (-0.34%) to 1.4836 after falling to 1.4811, while
AUD/NZD is up by 10 pips (+0.09%) to 1.1040 after falling to a low of 1.0996.

Watch Out For:

  • 6:45 am GMT: France’s final CPI expected to remain at 0.5%
  • 6:45 am GMT: France’s final HICP (y/y) to remain at 1.0%?
  • 7:30 am GMT: SNB’s monetary policy decision
  • 11:00 am GMT: BOE’s monetary policy decision. Read Forex Gump’s list if you wanna see what you can expect!