Global Markets:

  • Asian stock markets: Nikkei down 1.20 %, Shanghai Composite and Hang Seng up 0.05 %, ASX rose 0.20 %
  • Commodities: Gold at $1247 (+0.25 %), Silver at $17.40 (+0.25 %), Crude Oil at $82.05 (+0.15 %)
  • Rates: US 10 year yield at 2.165, German 10 year yield at 0.845, UK 10 year yield at 2.113

News & Data:

  • China GDP QoQ 1.9 %, Expected: 1.8 %, Previous: 2.0 %
  • China GDP YoY 7.3 %, Expected: 7.2 %, Previous: 7.5 %
  • China Industrial Production 8.0 %, Expected: 7.5 %, Previous: 6.9 %
  • China Retail Sales 11.6 %, Expected: 11.8 %, Previous: 11.9 %
  • New Zealand Credit Card Spending 4.4 %, Previous: 4.2 %
  • RBA Minutes: Important lenders maintain strong standards, indicators suggest modest economic growth in 3Q
  • RBA: Current policy stance appropriate for foestering growth, some time before jobless rate declines consistently
  • RBA: AUD high by historical standards given commodity fails, AUD offering less help than normal in achieving growth

Market Overview:

Heading into the European open, Asian equities have recovered after the better than expected Chinese econ data, aside from the Nikkei, which is trading at fresh intraday lows. The GPIF story yesterday boosted Japanese stocks, but many saw the rally that followed as an overreaction. Precious metals are little changed, with Gold and Silver at similar levels as yesterday. There has been lack of momentum in the past few sessions, but a breakout above $1250 in Gold may help. Meanwhile, the whipsaw price action in Oil continues.

In FX, there were no surprises from the RBA minutes and AUD/USD was little changed into the Chinese data release. The GDP and Industrial Production numbers both beat expectations, which led to a rally above 0.88. Offers near the tech resistance at 0.8812 have capped the topside so far, but the Aussie will likely be bid in the European session as risk appetite improves. AUD/JPY broke briefly above 94.00, but momentum waned amid USD/JPY selling.

USD/JPY came under pressure at the Tokyo open as the Nikkei opened lower. Leveraged names were the main sellers. Bids at 106.60 got filled and imminent support now resting at 106.50. Stops reported through 106.40 and then bids in better size towards 106.20. To the topside, offers noted at 107.20. EUR/USD remains well-bid and a test of the recent 1.2885 high seems imminent. Meanwhile, Cable is approaching the 1.62 level and a break above 1.6220 would confirm the s/t bottom at 1.5880 and pave the way for a 1.64 test. EUR/GBP steady at 0.7920 with offers reported at 0.7950 and bids into 0.7880. Upcoming Events:

  • 06:00 GMT – Swiss Trade Balance (2.64bln)
  • 09:55 GMT – RBA Assistant Governor Lowe speaks
  • 14:00 GMT – US Existing Home Sales (1.0 % MoM, 5.10mln)