Chinese data disappoints as the dollar retraces
City Index April 15, 2015 4:26 PM
<p>The AUD was again in focus overnight as the Chinese GDP dropped to 7% for Q1 on a year-on-year basis, which is the lowest reading […]</p>
The AUD was again in focus overnight as the Chinese GDP dropped to 7% for Q1 on a year-on-year basis, which is the lowest reading since Q1 in 2009. The disappointment didn’t stop there as the March reading for industrial production fell to 5.6% and just above the November 2008 record low of 5.4%, as retail sales data then finished the treble data miss with a reading of 10.2% versus the 10.9% consensus forecast.
European trading has seen the dollar trade with a bid tone following the retail sales inspired sell-off that has now cast further doubt on the first Federal Reserve rate hike, with June now a very remote possibility. The Empire manufacturing data and industrial production is likely to be scrutinised and sensitive to downside misses, as Federal Reserve Member Kocherlakota reiterated that the US central bank should not hike rates this year – as there is enormous uncertainty of inflation reaching 2% by the 2018 target.
Today will be all about the ECB and Bank of Canada meetings and although the consensus is for both monetary policies to remain unchanged, the market will be looking for comments from ECB president Draghi on the positive green shoot signs seen of late in the European data and a possibly earlier end to QE. He is also likely to be challenged on the possibility of a Greek exit as the market will look for signs that the BoC are willing to add an additional rate cut.
Supports 1.0580-1.0505-1.0460 | Resistance 1.0715-1.0780-1.0830
Supports 119.10-118.80-118.20 | Resistance 120.20-120.85-121.55
Supports 1.4550-1.4350-1.4230 | Resistance 1.4780-1.4820-1.4900
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.