Index at eight-week high
The Japanese economy expanded 1.4% on an annualized basis in the fourth quarter of 2018, matching economists’ estimates. The positive growth snapped two consecutive months of contraction and helped to avoid a technical recession. Domestic demand was a major driver of the rebound, rising 0.6% while business spending beat estimates with 2.4% growth rather than 1.8%.
The JP225 index advanced to its highest since December 18 as it nears the 61.8% Fibonacci retracement of the December drop at 21,346. The 100-day moving average sits at 21,586 and has capped prices since December 4.
JP225 Daily Chart
Source: OANDA fxTrade
China’s January trade numbers finally released
After waiting for a few days, we finally got to see China’s trade data for January. Conspiracy theorists may note the coincidence of the timing of the release and the start of trade talks. The trade surplus with the US shrank to $27.3 billion in the month from $29.9 billion in December. Overall exports rose 9.1% y/y while imports declined 1.5% y/y, both coming in better than economists’ estimates. In response the Aussie rose, though AUD/USD only managed 8an 8 tick rally as a knee-jerk reaction.
Waiting for the next trade talk soundbite
Other markets traded mixed during the Asian session, with traders waiting for any comments or headlines out of Beijing as the US-China trade talks officially kick off today. Having breached the 55-day moving average at 110.70 to the upside yesterday, USD/JPY struggled for momentum to attempt to crack the 200-day moving average at 111.32. Trading was confined to a tight 110.87-111.06 range and is now at 111.01.
USD/JPY Daily Chart
Source: OANDA fxTrade
The Kiwi continues to benefit from the comments yesterday from RBNZ Governor Orr’s comments on monetary policy, but failed to advance beyond yesterday’s peak. The Aussie is still riding the kiwi’s coat tails, with nothing locally to drive the antipodean currency.
German growth to slow
Economists are expecting GDP growth in Germany to slow to +0.7% y/y in the fourth quarter, which would be the slowest growth since Q2 2017. Money markets are implying only a 36% chance of an ECB rate hike by the end of this year, and that could drop if the slowdown is deeper. Shortly after we see the first revision of Euro-zone GDP growth for the same period, though no change is expected either on a quarterly or annualized basis from the +0.2% and +1.2% initial prints, respectively.
German GDP Growth Chart
Source: MarketPulse
The rest of today’s data slate has US retail sales for December (a delayed release due to the US government shutdown) and producer prices for January.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.