Today’s Economic events
- China Real GDP y/y 6.80% vs. 6.90%
- China Industrial production y/y 5.90% vs. 6.10%
- China retail sales y/y 11.10% vs. 11.30%
- Germany CPI m/m -0.10% vs. -0.10%; y/y 0.30% vs. 0.30%
- Swiss PPI m/m -0.40% vs. -0.20%; y/y -5.50% vs. -5.40%
- Eurozone current account 26.4bn vs. 19.3bn
- UK Core CPI y/y 1.40% vs. 1.20%
- UK CPI m/m 0.1% vs. 0.00%; y/y 0.20% vs. 0.20%
- UK PPI Input m/m -0.80% vs. -1.70%; PPI Output m/m -0.20% vs. -0.20%
- Eurozone CPI m/m 0.0% vs. 0.0%; y/y 0.20% vs. 0.20%
- Eurozone Core CPI y/y 0.90% vs. 0.90%
- Germany ZEW Economic sentiment 10.2 vs. 8.1
- BoE Carney speech
Coming up
- New Zealand Global trade index
- US NAHB housing market index
- New Zealand CPI
- Australia Westpac consumer confidence
The markets opened today looking into China’s numbers. The world’s second-largest economy posted a 7-year low GDP growth rate of 6.80% while industrial production increased at a slower pace of 5.90% with retail sales also trending flat at 11.10% growth. On a positive note, China’s services sector managed to drive the GDP, rising nearly 50.5%. Despite the weak numbers, the markets are trading strongly today. The Nikkei 225 is up a modest 0.55% while the Shanghai Composite closed with gains of 3.25% for the day.
The risk on market sentiment saw the Aussie posting strong gains. AUDUSD is up 098% for the day as the commodity risk currency posted strong gains after initially posting an intraday low near 0.684, to trade currently at 0.693. The NZDUSD is also posting some modest gains, up 0.49% for the day. The Kiwi, however, remains under pressure ahead of the inflation data and the GDT price index.
The Yen is up 0.43% for the day, with the Greenback testing 118Yen before easing back lower. The USDJPY follows the risk on mode following China’s data.
The European session got underway with the Euro continuing to post declines. EURUSD is down -0.21% for the day, trading at 1.086 support. Inflation data from Eurozone is flat at 0.20% for the month while Core inflation was also flat at 0.90% as expected. On the equity front, European markets are in the green, with German DAX up 2.24% for the day while the London FTSE100 is up 2.28%.
[Tweet “Mark Carney: “The time has not yet come to raise interest rates in the UK””]
The British Pound has turned weaker today despite an upbeat inflation data. UK Core consumer inflation increased 1.40% year on year basis, beating estimates of 1.20% while annualized headline inflation was up 0.20% matching estimates. UK’s PPI was also stronger, with declines of -0.80% against estimates of -1.70%. The British Pound initially surged on the data but soon gave back its gains as BoE Governor Mark Carney gave a dovish outlook in his speech scheduled later. In his speech, Carney noted that “the time has not yet come to raise interest rates in the UK” and noted that falling Oil prices, stronger exchange rate and China’s volatility are likely to keep inflation below the bank’s target rate. The BoE expects to see inflation return to the target of 2.0% in two years time. For the day, GBPUSD is down -0.17% after the Cable posted a session high to 1.4327.
On the commodities front, Crude Oil prices are looking to rebound on China’s GDP numbers which showed a lesser than expected slowdown from the world’s second largest economy. Crude Oil futures are up 0.95% for the day after opening lower at $29.20 on the NYMEX. Gold futures are down -0.35% for the day, trading at $1084 an ounce with prices staying range bound from yesterday’s high and low. The remainder of the evening is marked with data from New Zealand which includes the Global dairy price index and the quarterly CPI data followed by US NAHB housing market index and Australia’s Westpac consumer confidence.
