Regional Update post China GDP

The Australian  employment change number was slightly better at 19.8k versus 15k expected

Unemployment has edged down to 5.5% from 5.6%

AUDUSD did bounce some 20 pips higher and was poised to benefit from any hint of US weakness. But with the China GDP coming in on consensus,  whatever bullish sentiment the markets were positioned for an upside surprise after Zhou Xiaochuan’s comment earlier this week that the economy could grow 7 percent in the second half of the year should get priced out quickly. The  GDP reading could weigh negatively on both mainland Stock and currency markets as traders may position for further weakness into year-end suspecting financial curbs will continue to have a negative impact on growth in China with  GDP possibly topping.

USDCNH traders were caught short likely positioning for a more robust GDP print

The rest of the data is not terrible, but I suspect the markets will focus on a possible slower China  growth narrative

Outside of regional concerns the Big dollar doing little more than running in circles awaiting the nomination of the next Fed Chair and headway on the contentious tax reform bill.


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Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes