When is China’s data dump and how could it affect the AUD/USD?

Anil Panchal FXStreet

China Economic Data Overview

Early Friday, the market sees the annualized figures of April month Retail Sales and Industrial Production from the National Bureau of Statistics of China at 02:00 GMT. Investors would emphasize more on the data considering the latest swing of the dragon nation’s economics.

Retail Sales and Industrial Production (IP) bear upbeat forecasts of -7% and +1.5% versus -15.8% and -1.1% respective priors. Further, Fixed Asset Investment could also recovery from -16.1% to -10% on a Year To Date (YTD) basis for the April month.

Westpac forecasts retail sales to be a non-event unless surprising the markets:

The recovery in retail sales is likely to remain less impressive, with consensus -6%yr versus March’s -15.8%yr but plenty of scope for a surprise. April fixed asset investment is seen -10.0%yr year to date.

TD Securities, on the other hand, has a slightly dovish outlook:

The move back into expansion territory for the manufacturing PMI in March and April points to a small increase in industrial production in April though we continue to think any recovery is tentative given the likely increase in demand side pressures. We expect a 3.5% y/y increase in IP. Retail sales are likely to continue to remain soft given the cautious approach of the authorities to re-opening though the pace of decline is likely to lessen compared to last month. Consumer related activities are likely to remain under some pressure overall.

How could it affect the AUD/USD?

While the latest risk-on sentiment helps AUD/USD to ignore downbeat employment data, the quote could extend recoveries if the largest customer manages to print welcome statistics. It should, however, be noted that the Aussie-China tussle as well as the US-Sino tension, can keep the pair’s upside capped. On the contrary, disappointing data might not refrain to trigger a fresh downside.

Technically, sellers will look for entries below the confluence of 21-day SMA and an 18-day-old rising trend line, near 0.6440 now, which in turn can refresh monthly low near 0.6380. Alternatively, a weekly resistance line near 0.6490 guards the pair’s nearby recoveries ahead of the May 11 high of 0.6562.

Key Notes

AUD/USD: Bulls keep 0.6500 on radars with focus on China data

AUD/USD Forecast: Aussie keeps grinding lower

About China's Industrial Production

Industrial output is released by the National Bureau of Statistics of China. It shows the volume of production of Chinese Industries such as factories and manufacturing facilities. A surge in output is regarded as inflationary which would prompt the People’s Bank of China would tighten monetary policy and fiscal policy risk. Generally speaking, if high industrial production growth comes out, this may generate a positive sentiment (or bullish) for the CNY (and AUD), whereas a low reading is seen as negative (or Bearish) for the CNY (and AUD).

About China's Retail Sales

The Retail Sales report released by the National Bureau of Statistics of China measures the total receipts of the retailed consumer goods. It reflects the total consumer goods that the various industries supply to the households and social groups through various channels. It is an important indicator to study the changes in the Chinese retail market and reflecting the degree of economic prosperity. In general, A high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.