The financial markets are quite steady as another week starts. China data released over the weekend were disappointing but reactions are muted. Industrial production rose 6.0% yoy in April versus expectation of 6.5% yoy and prior month's 6.8% yoy. Retail sales rose 10.1% yoy versus expectation of 10.6% yoy and prior month's 10.5% yoy. Fixed asset investment rose 10.5% yoy versus expectation of 11.0% yoy and prior month's 10.7% yoy. The of April data together with trades were in sharp contrast to the upbeat data in March and added to doubts about China's recovery. Nonetheless, the China SSE (LON:SSE) composite opened mildly lower and quickly pared losses and trading flat at the time of writing.
In the currency markets, major pairs and crosses are generally staying in Friday's range so far. Aussie is indeed recovering in spite of weak China data but strength is very limited. Sterling and other commodity currencies are also mildly higher. Meanwhile yen stays the weakest one as the impact of recent verbal intervention from Japan continues. Trading activities in European session could be quiet with Swiss, France and Germany on bank holidays.
Looking ahead, FOMC minutes will be one of the highlights of the week. Markets will look into them for the chance of rate hike in June. Aussie has been under much pressure after RBA's surprised rate cut this month and RBA minutes might shed some lights on the chance of further cut. Aussie will also face test from employment data. A number of key economic data will be released from UK including CPI, employment and retail sales. Nonetheless, Sterling's reactions to them would be muted as focus stays on the EU referendum in June. Here are some highlights for the week ahead:
- Monday: US Empire State manufacturing index, NAHB housing market index, TIC capital flow
- Tuesday: RBA minutes; New Zealand inflation expectations, Swiss PPI; UK CPI, PPI; Eurozone trade balance; Canada manufacturing sales; US CPI, housing starts, industrial production
- Wednesday: New Zealand PPI; Japan GDP; UK employment; Eurozone CPI final; Canada foreign securities purchases; FOMC minutes
- Thursday: Australia employment; Japan all industry index; Eurozone current account, ECB meeting accounts; UK retail sales; Canada wholesale sales; US Philly Fed survey, jobless claims
- Friday: Canada CPI, retail sales