- Chinese GDP beat a forecast in Q1
- Retail sales and industrial output came in above expectations
- AUD remains little changed after a stellar week
The main event during the Asian session was a release of Chinese GDP for Q1 which proved to beat a forecast in a yearly basis. Growth in the past week was at 6.9% yoy, while a projection had suggested a 6.8% yoy rise. In turn, when it comes to a quarterly basis an increase by 1.7% was in line with anticipations. The China’s Statistics Department said that the economy continued steady, improving momentum in a first half of this year. Moreover, growth in H1 is to lay a solid foundation for achieving the full-year GDP objective.
Furthermore, besides the GDP reading there were monthly releases of retail sales and industrial output for June. Both quite easily beat consensuses and came in at 11% yoy and 7.7% yoy respectively, whereas projections had pointed to increases by 10.6% yoy in case of retail sales and 6.5% yoy regarding industrial production. Those prints have settled down some concerns over a so-called ’hard-landing’.
Moving on, we got a services PMI print for June from the New Zealand’s economy which declined slightly from 58.8 to 58.6. Either way, all subindices turned out to be by far above 50 points, hence it could be treated as another firm reading of soft data. However, the NZD has gained of late substantially, hence some a downward pressure could be just around the corner. This might be especially true when we factor in the speculative positioning which has become remarkably elevated.
At the end, it’s worth mentioning remarks coming from RBNZ’s Bascand who pointed that lower NZD would help rebalance growth. Nonetheless, the NZD has remained broadly unimpressed following those commentaries. Anyway, the greenback is getting back some of its appeal in early trading as commodity-related currencies are among the worst performers, losses are not so severe though.
Having looked at the AUDUSD chart one could suppose that the pair could be prone to a corrective move towards a broken resistance zone placed at around 0.7750. If sellers would be able to breach this level as well, it could lead to a more massive downward move even toward 0.7620.
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