Global Markets:

  • Asian stock markets: Nikkei down 0.70 %, Shanghai Composite gained 0.85 %, Hang Seng rose 0.10 %, ASX lost 0.25 %
  • Commodities: Gold at $1243 (+0.15 %), Silver at $17.04 (-0.20 %), WTI Oil at $52.10 (-1.50 %), Brent Oil at $58.50 (-0.95 %)
  • Rates: US 10 year yield at 1.972, UK 10 year yield at 1.614, German 10 year yield at 0.358

News & Data:

  • China CPI 0.3 % m/m, Expected: 0.4 %, Previous: 0.3 %
  • China CPI 0.8 % y/y, Expected: 1.0 %, Previous: 1.5 %
  • China PPI -4.3 % y/y, Expected: -3.8 %, Previous: 3.3 %
  • Australia NAB Business Confidence 2.0, Previous: 4.0
  • Australia House Price Index 1.9 %, Expected: 1.8 %, Previous: 1.4 %
  • Japan Industry Activity -0.3 %, Expected: 0.1 %, Previous: 0.2 %
  • UK BRC Retail Sales 0.2 % y/y, Expected: 0.5 %, Previous: -0.4 %

Markets Update:

Chinese data overnight missed expectations, with both the inflation numbers and the PPI arriving lower than anticipated. It didn't have much of an impact on the commodity currencies though, and most of the Asian major stock indices are up on the day. Dealers note that there has been some short covering in AUD/USD, probably from traders who sold it yesterday on the Chinese trade balance numbers from the weekend. The pair reached a high of 0.7840 and declined back to 0.7815. Similar price action in NZD/USD, which got to a high of 0.7480. NZD traders also took note of comments from the NZ Finance Minister English, who said that the RBNZ is looking at new rules for property investors in order to curb house-price inflation. According to the FinMin, the RBNZ is facing a dilemma because it could not raise rates due to the overall slow inflation, which means that they don't have a tool that enables them to control the housing market.

USD/JPY had a very quiet session. The pair briefly fell sub-118.40, but demand from Japanese names helped to send it back to 118.50. Light stops reported through 118.30 and down to 118.10, with larger buying interest expected towards the 118.00 level. To the topside, 119.20/25 now the pivotal resistance area. Meanwhile, EUR/USD consolidated in a 1.1320-45 range. It is possible that we will see a rather tight range in the pair until the next meeting between Greek and Eurogroup officials, tomorrow.

Looking ahead, the main data event of the day will be the UK Industrial & Manufacturing data, which will be released at 0930 GMT.

Upcoming Events:

  • 06:45 GMT – Swiss Unemployment Rate (3.2 %)
  • 07:45 GMT – French Industrial Production (0.4 % m/m)
  • 08:15 GMT – Swiss CPI (-0.7 % y/y)
  • 09:00 GMT – Italian Industrial Production (0.1 % m/m, -1.3 % y/y)
  • 09:30 GMT – UK Industrial Production (0.1 % m/m, 0.7 % y/y)
  • 09:30 GMT – UK Manufacturing Production (-0.1 % m/m, 2.0 % y/y)
  • 15:00 GMT – US JOLTs Job Openings (4.99mln)