The risk-on/risk-off trade is less cut and dried this week than in prior weeks but the data out of China overnight would have been a “risk-off” event if we were still playing the same game.
Commodity currencies paid attention, however. USD/CAD is up to 1.0960 after Chinese industrial production failed to live up to expectations and CPI fell from year ago levels. AUD edged lower, falling to a modest new pullback low at 0.8322 overnight.
Keep an eye on US equities today. They pay very close attention to the goings on in Beijing, and could be undermined by today’s data. Mostly, today will be a waiting game ahead of the FOMC tomorrow.
