A take from Credit Agricole, ascribing the resilience of the Australian dollar in the wake of the poor China data to expectations of accelerated stimulus.
The data was ugly, 3 swings, 3 misses …
- China Retail sales for April: 7.2% y/y (expected 8.6%)
- China April Industrial production: 5.4% y/y (expected 6.5%)
- China Fixed asset investment (excl rural) for April 6.1% y/y (expected 6.4%)
The AUD, a bit softer but not much yep:
Its a perennial argument - the data is weak sell the AUD, no wait, the data is weak means there will be more stimulus, buy the AUD.
The data probably also gives a little more impetus to China to seek a trade deal. Of some sort at least. Right now the talks are not going well at all. And its difficult to see China giving any ground on the key issues it has fought years to protect (rightly or wrongly).
