Today’s Key Market Drivers: 18th April 2019
China GDP beats market estimates sending the US Dollar back lower.
China’s 1st quarter GDP for 2019 beat market expectations, when released on Wednesday coming in at 6.4%, annualised which saw the US Dollar quickly sold off as traders bought back into emerging market currencies that have high exposure and reliance on China.
China’s growth number showed industrial production has rebounded strongly with consumer demand also remaining strong. Fears of a sharp slowdown in the Chinese economy were off base and this helped send the Kiwi Dollar back higher after suffering a sharp sell-off following the weaker than expected CPI reading earlier in the morning.
UK inflation data missed estimates but not enough to send the Pound lower.
The Pound held its ground on Wednesday following weaker than expected March inflation figures. Ordinarily I would expect to see the Pound sold off given the inflation number missed estimates however traders seemed more interested in trading the volatility the China GDP number created.
One other reason why the UK Inflation reading didn’t get a larger market reaction is that UK inflation data is released monthly and getting a true and accurate reading on inflation on a monthly basis is more challenging than it is on a quarterly basis. Australian and New Zealand inflation data is only released quarterly and you saw the market’s reaction after the quarterly New Zealand inflation reading yesterday. When inflation is released quarterly the chances of a bigger shift in inflation exists and therefore a tick lower on UK inflation from February to March was not seen as a biggie.
Aussie unemployment data will be key for the local currency today.
Australia’s official unemployment rate will be released today along with the number of jobs created and lost over the past month. The market is expecting the unemployment rate to have ticked up to 5% with around 15,000 jobs to have been created. If the unemployment rate goes higher and fewer jobs have been created the reaction from traders will likely be to immediately short the AUD. The opposite is true of the unemployment number beats estimates and if it’s in line with expectations it won’t likely move much at all.
In the past, the AUD v USD has moved up to half a cent or 50 ticks post an out of line with expectation jobs number so keep an eye on the local currency at 11.30am AEST today.
Euro Manufacturing data will be closely watched today.
The Euro has continued to be well supported this week as the US Dollar weakened and traders inside investment banks and hedge funds have had no reason to buy any safe haven currencies with increased volume. China’s stronger than expected GDP reading yesterday also helped support the Euro because the Euro Area economy is the largest economic region in the world and China is its biggest trading partner.
Euro Area Manufacturing numbers are set to be released today and I expect the Euro will surge higher if the figures beat market estimates. Traders are looking for any signs the Euro Area economy has bottomed and technically and fundamentally the Euro still looks attractive to me.
No reports or social media updates over Easter.
The LTG GoldRock team, GoldRock Insider Report and Live Training room will return on Tuesday 23rd April. I’m also planning on taking a break from social media so other than my daily Sunrise videos I won’t be available to answer any questions or comments until we return on April 23rd.
If I take any trades on my own personal account, I will send an alert via the Trade Time App
Don’t underestimate the power of consistency and desire.
About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
If you would like to speak to one of our Senior Client Advisors regarding the relative client opportunities offered at LTG GoldRock and how you can follow along with our Professional traders each day in our live trading room please contact us today or you can register for one of our a live coaching and trading webinars by clicking here.