Asian Stocks Mixed, Gains Seem Fragile Despite Stronger China GDP
Asian Stocks Talking Points:
- Equity put in a patchy performance despite strong data
- Most indexes gained initially but some could not hold on
- The US Dollar slipped back, with its Australian cousin gaining
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Asia Pacific stocks were mostly higher on Wednesday thanks to some better-than-expected economic readings out of China.
Official Gross Domestic Product rose by 6.4% compared to the same period last year, better than the 6.3% tipped by economists, on average. Industrial production figures for March beat consensus by far more, and retail sales also exceeded forecasts.
Given all the recent worries about economic slowdown in various parts of the world, and the still-unsettled state of China/US trade there was obviously some relief in the markets that the world’s second-largest economy appears to be at least treading water. That even this may be coming at the cost of increasing already high debt seems to be a worry for another day as far as investors are concerned.
The Australian Dollar scaled two-month peaks in the aftermath of that Chinese data and held most of those gains through the session. The US Dollar slipped modestly, with the Euro higher as risk-appetite got a fillip.
USD/JPY is heading up towards the top of its recent trading band.
However, recent daily ranges have been quite small, suggesting perhaps that indecision is rising in this market. Support at the range base is close at hand, at 110.86. This could be tested in short order.
There’s plenty of economic life left in Wednesday’s global session. Official inflation figures are coming up from the UK, Canada and the Eurozone. Trade balance data are also due from the US, along with wholesale and crude oil inventory numbers. Central bank watchers can look to the Bank of England’s Mark Carney and the Bank of France’s Francois Villeroy de Gallhau. Both are scheduled to speak in Paris.
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--- Written by David Cottle, DailyFX Research
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.