Back
15 Apr 2015
China's data debilitates the Aussie, ECB policy announcement key
FXStreet (Bali) - The Australian Dollar was the worst performing currency after weak Chinese data, including a slightly lower-than-expected GDP number for Q1 2015 (QoQ).
China GDP growth came at 7.0% in Q1 2015, in line with market expectations but the QoQ print stood at 1.3%, below forecasts of 1.4%. Additionally, China retail sales (YoY) came below forecasts in March, with actual at 10.2% vs 10.9%, industrial production (YoY) came in at 5.6%, below forecasts of 6.9%, and lastly, China urban investment (YTD) (YoY) stood at 13.5% vs 13.8% expected.
The Kiwi traded surprisingly strong and ends the session as the main winner above the 0.75 round number after a bounce sub mentioned number, with AUD/NZD selling interest towards parity a factor providing additional strength to the Kiwi.
The Japanese Yen, meanwhile, also traded in a soft note, testing offers circa 119.50/60 day highs, with the Japanese benchmark index (Nikkei 225) playing no part as a proxy for Yen moves, as the index heads into the close at 0.04%.
Main headlines
China's GDP Q1 2015 meets expectations
RBNZ Spencer: Action needed to reduce housing imbalances
Moody's: Australia's Aaa rating supported by low debt, economic flexibility
Fed's Kocherlakota: Raising rates in 2015 would be inappropriate
Heading into Europe
During the early European morning, CPI data out of Germany will be the main focus for EUR traders (due at 6.00 GMT), followed by inflation figures in France (6.45 GMT) and the European trade balance data at 9 GMT.
Trading volume is expected to be fairly subdued in the European morning as the market stays non-committal ahead of today's ECB policy announcement and press conference at 12.30 GMT. Earlier at 11.45 GMT, the Central Bank will communicate its rate decision, which is widely expected to remain unchanged, after recently embarking in a planned 19-month quantitative easing program.
Nomura Economist Nick Matthews shared his view on the ECB meeting today, noting that he "is not expecting any changes to the monetary policy stance nor any substantial changes to the parameters of the Public Sector Purchase Programme (PSPP) beyond an expanded list of eligible Agencies."
Matthews adds: "The statement and press conference will have to balance the positive message of cyclical improvement in the economic data with keeping very premature taper expectations contained", the Economist said.
Lastly, Matthews notes that "while we expect Mr Draghi to express ongoing satisfaction with the progress of the PSPP both in terms of implementation and market impact, the ECB President will likely reinforce that an improvement in the inflation outlook will take time, the Governing Council continues to envisage full implementation of the PSPP and purchases could extend beyond September 2016, if needed."
China GDP growth came at 7.0% in Q1 2015, in line with market expectations but the QoQ print stood at 1.3%, below forecasts of 1.4%. Additionally, China retail sales (YoY) came below forecasts in March, with actual at 10.2% vs 10.9%, industrial production (YoY) came in at 5.6%, below forecasts of 6.9%, and lastly, China urban investment (YTD) (YoY) stood at 13.5% vs 13.8% expected.
The Kiwi traded surprisingly strong and ends the session as the main winner above the 0.75 round number after a bounce sub mentioned number, with AUD/NZD selling interest towards parity a factor providing additional strength to the Kiwi.
The Japanese Yen, meanwhile, also traded in a soft note, testing offers circa 119.50/60 day highs, with the Japanese benchmark index (Nikkei 225) playing no part as a proxy for Yen moves, as the index heads into the close at 0.04%.
Main headlines
China's GDP Q1 2015 meets expectations
RBNZ Spencer: Action needed to reduce housing imbalances
Moody's: Australia's Aaa rating supported by low debt, economic flexibility
Fed's Kocherlakota: Raising rates in 2015 would be inappropriate
Heading into Europe
During the early European morning, CPI data out of Germany will be the main focus for EUR traders (due at 6.00 GMT), followed by inflation figures in France (6.45 GMT) and the European trade balance data at 9 GMT.
Trading volume is expected to be fairly subdued in the European morning as the market stays non-committal ahead of today's ECB policy announcement and press conference at 12.30 GMT. Earlier at 11.45 GMT, the Central Bank will communicate its rate decision, which is widely expected to remain unchanged, after recently embarking in a planned 19-month quantitative easing program.
Nomura Economist Nick Matthews shared his view on the ECB meeting today, noting that he "is not expecting any changes to the monetary policy stance nor any substantial changes to the parameters of the Public Sector Purchase Programme (PSPP) beyond an expanded list of eligible Agencies."
Matthews adds: "The statement and press conference will have to balance the positive message of cyclical improvement in the economic data with keeping very premature taper expectations contained", the Economist said.
Lastly, Matthews notes that "while we expect Mr Draghi to express ongoing satisfaction with the progress of the PSPP both in terms of implementation and market impact, the ECB President will likely reinforce that an improvement in the inflation outlook will take time, the Governing Council continues to envisage full implementation of the PSPP and purchases could extend beyond September 2016, if needed."