- China October industrial output +16.1%, retail sales +16.2%
- China October trade balance +$24 billion
- This data suggests that economic recovery is ongoing
- Japan’s September machinery orders much stronger than expected
- Australia November consumer sentiment index -2.5%
- New Zealand food prices lower in October
- RBNZ again try to talk the NZD lower
- Fed’s Fisher: current monetary policy appropriate
It has been another mainly quiet trading day in Asia with the majors all trading inside 50 pip ranges. Despite some excellent economic data out of both Japan and China which normally would promote the so-called risk trades ie AUD/JPY, GBP/JPY etc, the market has in fact gone the other way with JPY strength being the main feature of the day.
USD/JPY triggered weak stops below 89.70 after the excellent machinery orders data from September. The fall has been fairly orderly but it has been solid, showing little sign of wanting to bounce. Next layer of bids at 89.20. Range: 89.33/88.
The JPY crosses have been led lower by GBP/JPY as traders are still wary of being caught long sterling after yesterday afternoon’s vertical drop on the Fitch statements. Range: 149.35/150.40.
AUD/USD still hasn’t managed to trade above its recent high at .9325 and the talk in the market is of more sell orders at .9330/40. Nevertheless, dips remain quite shallow and the strong data out of China and the still rising gold price are both supportive of the AUD. NZD fell briefly in early trade on the RBNZ comments but as usual recovered quite quickly.
Cable was weighed down by the aforementioned GBP/JPY selling but it has still only managed a 40 pip range, 1.6713/54. EUR/USD saw lots of good selling interest above 1.50, range 1.4977/1.5013.
Markets: Nikkei and Kospi were both flat, HK +0.5$, Sydney +0.4%. Oil steady $79/bbl, Gold makes more good gains, up $5 to $109/oz with strong gains on the Indian gold futures markets.
