When is China’s data dump and how could it affect the AUD/USD?


Early Friday sees the annualized figures of May month retail sales and industrial production from the National Bureau of Statistics of China at 07:00 GMT. Investors would emphasize more on the data considering the latest swing of the dragon nation’s economics. The statistics gain more importance for the AUD/USD amid increasing speculations of another rate cut from the Reserve Bank of Australia (RBA).

Retail sales growth is expected to clock in at 8.1% year-on-year against 7.2% reported prior whereas industrial production is also seen following recent macro strength with 5.5% YoY figure versus 5.4% previous. Adding to the line is May month fixed asset investment data on the year to date YoY basis. The investment gauge is likely remaining unchanged at 6.1%.

How could it affect the AUD/USD?

The renewed trade spat with the US and recent weakness of the headline manufacturing indices weigh on the Australian Dollar (AUD) as China is the largest trading partner of Australia.

Given the forecasts suggesting an overall upbeat data, the Aussie might recover some of the latest losses after the announcement. 

In doing so, the AUD/USD pair may have to surpass 0.6940 and 0.6960 number to the north in order to aim for a 50-day simple moving average around 0.7010.

On the contrary, disappointments from data can drag the quote beneath the March month bottom near 0.6900, which in turn opens the door for fresh south-run to 0.6860 and then to 2016 low surrounding 0.6830.

Key Notes

AUD/USD clings to 2-week bottom ahead of China data

AUD/USD analysis: remains vulnerable around 0.6900

About China's industrial production data

Industrial output is released by the National Bureau of Statistics of China. It shows the volume of production of Chinese Industries such as factories and manufacturing facilities. A surge in output is regarded as inflationary which would prompt the People’s Bank of China would tighten monetary policy and fiscal policy risk. Generally speaking, if high industrial production growth comes out, this may generate a positive sentiment (or bullish) for the CNY (and AUD), whereas a low reading is seen as negative (or Bearish) for the CNY (and AUD).

About China's retail sales data

The Retail Sales report released by the National Bureau of Statistics of China measures the total receipts of the retailed consumer goods. It reflects the total consumer goods that the various industries supply to the households and social groups through various channels. It is an important indicator to study the changes in the Chinese retail market and reflecting the degree of economic prosperity. In general, A high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY.

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