Talking Points:

  • Asian markets found the going tough despite more record Wall St. performances
  • Chinese industrial and retail data fell short of expectations
  • The focus now is on US inflation data.

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Most Asian stock markets were weaker Thursday, despite new closing highs on Wall Street, as disappointment at China data added to a sense of exhaustion after the week’s gains.

August’s industrial output missed forecasts by quite a wide margin. Moreover its 6% annualized gain was the weakest for eight months. Retail sales were closer to the mark, but still weaker than expected. North Korea reportedly made some belligerent noises too, directed at Japan and the US.

All of the above was enough to give stock investors some pause, although Australian assets got a lift from a set of domestic employment numbers which blew all forecasts out of the water. Only the Australian Dollar stayed up into the local close, though, with the ASX 200 slipping back.

The Nikkei 225 closed down 0.3%, with all bourses except South Korea’s Kospi in the red.

Meanwhile the US Dollar’s rally paused as investors looked to official US inflation data, due later, for clues as to whether the Federal Reserve might stick to its current, measured pace of monetary tightening. The Consumer Price Index is expected to have risen by 1.8% in August and if so a modest rising trend will be confirmed over the past three months.

Gold prices plumbed two-week lows as investors continue to shun haven assets. But crude oil prices clung to the previous session’s robust, 2% gains which came in turn on a prognosis of higher global demand from the International Energy Agency.

The star of what’s left of Thursday’s show will probably be that US inflation data, but there’s also news of US average earnings and initial jobless-claim levels. From Canada will come house price information. The Bank of England will announce its September monetary- policy decision. Interest rates aren’t expected to move but any commentary will be of extreme interest to Sterling markets given recent inflation strength.

Bitcoin continued to look weak although it failed to extend its recent, sharp fall from 2017 peaks in the Asia session. This may have been on a lack of any more concrete news, however, in a week which has seen investors fret increased regulation of the market, especially from China, and after extraordinary hostile comments on the asset from JP Morgan Chief Executive Jamie Dimon. He called Bitcoin a “fraud” on Wednesday.

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter: @DavidCottleFX