Tonight important data from the Chinese economy regarding retail sales and industrial production were published. A change in the wage index, which is important from the point of view of the condition of the Australian labor market, has also been published. Unfortunately, all publications disappointed, pushing AUD/USD to the levels we last observed in January this year.
During the trade war, data from China are closely watched by market participants to find out what their economic impact on US customs is. In addition, the slowdown in the Chinese economy may be associated with a slowdown in global growth, which is another concern of investors. According to today's data, industrial production in China increased by 5.4 percent. y/y in April 2019, thus dropping sharply from 8.5 percent. growth in March. The last reading was much lower than the market consensus, which estimated the reading at 6.5 percent.
Meanwhile, retail sales increased by 7.2 percent y / y in April 2019, slowing down from 8.7 percent growth in the previous period. It was also a publication lower than the consensus at the level of 8.6 percent. Consequently, it was the weakest annual increase in retail sales since May 2003, despite government efforts to boost domestic consumption. After such disappointing data there are more speculations that Beijing will expand the program stimulating its economy.
On the other hand, Australian data presented an increase in the wage index at 0.5 percent for the first quarter in relation to the previous quarter with a market consensus of 0.6 percent. These figures are in line with market expectations for interest rate cuts by the Australian central bank - RBA perhaps already at its meeting on June 4.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal Opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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