When is China’s data dump and how could it affect the AUD/USD?
Early Monday sees the annualized figures of June month retail sales and industrial production from the National Bureau of Statistics of China at 02:00 GMT. Investors would also emphasize on the second quarter (Q2) 2019 gross domestic product (GDP) figure that’s up for release with other headline catalysts and increase the importance of data-dump.
Retail sales growth is expected to have softened to 8.3% year-on-year against 8.6% reported prior whereas industrial production may deviate from early-month PMI figures and may rise 5.2% YoY figure versus 5.0% previous readout.
The headline GDP growth is expected to remain close to the lower end of the government’s 6.00 – 6.5% target range with market consensus favoring 6.2% versus 6.4% on YoY and 1.5% against 1.4% QoQ for the Q2 2019.
Analysts at Westpac were less positive of the release as they said in a report that,
The calendar focus in Asia-Pacific trade today will be China’s Q2 GDP and June activity data (12 pm Syd/10am local). GDP will be the main headline-driver as usual but it also has the least potential to surprise, having printed within 0.1ppt of the median Bloomberg forecast every quarter since June 2015. Consensus is 6.2%yr, which also matches Chinese press reports Friday. This is a further gradual softening after 6.4%yr in both Q4 18 and Q1 19. Likely to be overshadowed but well worth watching is June industrial production, seen ticking up to 5.2%yr from 5.0%yr in May, which was the slowest pace since 2002. We also see retail sales (f/c 8.5%yr) and fixed asset investment, also very much on a decelerating trend.
How could it affect the AUD/USD?
Early-month releases of downbeat purchasing manager index (PMI) and lack of positive developments surrounding the US-China trade negotiations are likely caps over China’s data-dump, which in turn could be well portrayed by the Australian Dollar (AUD) as the dragon nation is Australia’s largest customer. However, pessimism surrounding the US Dollar (USD), that has been fueling the quote, could gain additional strength if the data surprise traders with upbear releases.
Looking at the overall mixed market consensus, the AUD/USD pair is likely to rise beyond the current month high surrounding 0.7050 that hold the key to late-April top close to 0.7070 and 0.7100 round-figure.
Meanwhile, disappointment from the data could fetch the quote back to sub-0.7000 region wherein 21 and 50-day exponential moving averages (EMA) may please bears near 0.6980/75. It should also be noted that current month low close to 0.6910 could become sellers’ favorite if prices keep declining below 0.6975.
Key Notes:
AUD/USD Analysis: bullish only beyond 0.7050
AUD/USD: Rising into uncomfortable territoires for the RBA
AUD/USD technical analysis: Aussie clings to weekly gains near 0.7000 figure
About China's Gross Domestic Product (GDP) data
The Gross Domestic Product (GDP) released by the National Bureau of Statistics of China studies the gross value of all goods and services produced by China. The indicator presents the pace at which the Chinese economy is growing or decreasing. As the Chinese economy has influence on the global economy, this economic event would have an impact on the Forex market. Generally speaking, a high reading is seen as positive (or bullish) for the CNY, while a low reading is seen as negative (or Bearish).
About China's industrial production data
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 data
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.