When is China GDP release and how could it affect AUD/USD?

China's National Bureau of Statistics will publish the fourth quarter gross domestic product (GDP) at 02:00 GMT along with the retail sales, industrial production and fixed asset investment numbers for December.  

Forecasts

The world's second-largest economy is expected to have grown 6.4 percent year-on-year in the fourth quarter – a level last seen in early 2019 – following a 6.5 percent expansion in the third quarter. The 6.4 percent print could push down 2018 GDP to 6.6 percent; the lowest level since 1990.

Meanwhile, retail sales are forecast to rise 8.2 percent year-on-year in December, having jumped 8.1 percent in November. The December Industrial production is expected to come in at 5.3 percent, following a 5.4 percent reading in November.

Impact on the Aussie dollar

A dismal GDP reading would confirm what markets already know: China is feeling the heat of the Sino-US trade war and the weakening domestic demand. That would further boost China stimulus expectations.

Both PBOC and the Chinese government have pledged more support for the economy this year, but have ruled out "flood-like" stimulus.

Put simply, there is less scope for "bad news is good news"-like action in the Aussie dollar – a proxy for China.

AUD/USD could feel the pull of gravity, having charted a bearish inside-day on Friday, especially if consumption, as represented by retail sales, misses estimates by a big margin. That would validate the message delivered by the slide in December imports that domestic demand (consumption) is unlikely to compensate for the weakness in the international trade.

As of writing, the AUD/USD is trading at 0.7162. Thursday's low of 0.7147 is the level to beat for the bears. On the higher side, 0.7235 (Jan. 11 high) is the key resistance.

What is GDP?

The Gross Domestic Product (GDP) released by the National Bureau of Statistics of China studies the gross value of all goods and services produced by China. The indicator presents the pace at which the Chinese economy is growing or decreasing. As the Chinese economy has an influence on the global economy, this economic event would have an impact on the Forex market. Generally speaking, a high reading is seen as positive (or bullish) for the AUD, while a low reading is seen as negative (or Bearish).