- Reserve Bank of Australia more upbeat on Australian economy
- Chinese economy slows again
By David Johnson
Chinese economic growth slowed again; a 1.4% quarterly growth figure is down from the 1.6% figure in Q4 of last year but the annualised rate is just about 6.8% still. However, industrial production in China is also slower at 6.0% compared to the 7.2% we saw in February. That sent a shudder through the countries that supply China and their currencies quivered a little.
One of those currencies is the Australian Dollar. China is Australia’s largest export market after all. Aussie traders were also able to get the views of the board of the Reserve Bank of Australia. The minutes from their April meeting showed they are rather more upbeat about the Australian economy than they have been of late. In spite of the Reserve Bank of Australia’s optimism, the Australian Dollar weakened again.
Sterling had another positive day in spite of a lack of UK data. Today is a very different picture though. We expect average earnings to be above consumer inflation and we expect the unemployment data to be positive, although the unemployment rate should stay around this very strong 4.3%. Sterling is holding station above $1.43 and €1.15 and may move on again if the data is any more positive than the forecasts suggest.
On the other side of the channel, we expect the ZEW economic sentiment index to reflect a degree of pessimism in Germany and that ought to further weaken the Euro.
As for the US data, well, all the forecasts are positive. A rise in housing starts and building permits are envisaged. An element of USD strength is likely if those forecasts are true. However, speakers from the Federal Reserve have been espousing all manner of conflicting views over the past few days, so they are keeping traders guessing.
Today’s Canadian Data is also forecast to be upbeat; manufacturing sales are expected to have bounced back from last month’s dip. The Canadian Dollar is good value right now.
And, I have a number of news alerts set in Google and elsewhere. They alert me to news about the markets but also about strange stories for the footer of this report. I am starting to wonder whether my definition of ‘funny news’ is the same as other people though. Under ‘funny news’ I got a report that spoke of a Japanese man who is being held by police over a number of body parts in his apartment. I am hoping someone has tagged that incorrectly or maybe I just need a lie down.