Good news for RBA

Wednesday marked the release of China’s Retail Sales yoy (year-on-year) for the month of October. Results show a growth of 11%, compared to an expected 10.9% and a previous 10.9%, with the industrial production at +5.6% (expected 5.8%, previous 5.7%) and urban investments at +10.2% (same as forecasted). The decrease is to be perceived as mixed-negative due to the decrease in the industrial production – leading measure of the economy. In contrast, the pick-up in retail sales is not important for the big picture. As the deflationary pressure is mounting continuously going forward, both imports and exports are suffering. It will come as no surprise if PBOC (People’s Bank of China) chooses to for a further easing in the country’s monetary policy.

The pound lost its momentum during the European morning, as the GBP/USD trend is dragging towards the 1.5135 area. The trigger was the release of UK’s Claimant Count Change which came out 3.3K in October versus an expected 1.5K and a September reading of 0.5K. Unemployment rate went further down to 5.3% in September, as Average Earnings read below expectations.

On Thursday, the AUD/USD major rose as numbers went up in Australia’s jobs data report which blew away all the downward shaping the trend and relieved the bulls back over the .7100 threshold. RBA’s (Royal Bank of Australia) decision not to cut the monetary policy rates was well thought, Tony Abbot’s growth agenda becoming a “dream come true”. The full-time jobs gauge pointed at a 40K increase versus last month’s 10K decrease, while part-time jobs jumped with 18.6K. Looking at the unemployment key rate, results came out of RBA’s advised bracket of 6% – 6.5% reading 5.9% in October, versus 6.2% in September and an expected of also 6.2%. However, results also show growth in the participation rate, from 64.9% previous to 65.0% with an expected 64.9%.

The EUR/USD gained momentum and hiked to new daily highs as the dollar weakened across the board. The enabler was Yellen’s (Fed’s Chair) lack of commentaries over the monetary policy’s path during the opening speech in Washington.

Things are continuing to look bad for the crude, as prices are extending their weekly decline, registering over 3-month lows in the $42.00 area, more exactly at $41.75/barrel with a 2.8% total loss only for yesterday. WTI’s (West Texas Intermediate) barrel retraced once again after OPEC’s reports over the supply glut which emphasized on the glut’s continuity, the demand’s future evolution not being able to outgrow it. As per EIA’s (US’s Energy Information Administration) latest info oil stocks have increased by an immense 4.2 billion barrels only last week, as expectations were settled at mere 1.02 million barrels gain.