Sentiment improves as China data boosts hopes of 5% growth
The government’s recent 2023 growth target of ‘around’ 5% seems to be on track according to the NBS, which helped commodity FX and indices rise during the Asian session.
Share this:
China’s banks lent a record ¥4.9 trillion in January as the economy reopened form lockdowns. And there was some anticipation to see whether the new loans were making their way through the economy to aid the governments GDP target of ‘around’ 5% this year. Early data suggests they are.
- Retail rose to 3.5% as expected, up from -1.8% previously
- Fixed asset investment rose 5.5%, above 4.4% expected and 5.1% prior
- Industrial output rose 2.4% y/y (whilst this was below estimates of 2.6% y/y, is a big improvement from 1.4% in January).
During the accompanying press conference, the NBS (National Bureau of Statistics) cited seasonality for the slight rise in the unemployment rate to 5.5%, but more importantly, China’s growth target of around 5% is in line with economic data although the economy does face many challenges.
Whilst these may not be knockout numbers, they’re certainly an improvement and will contribute to Q1 GDP figures. And against the backdrop of the bad start to the week we had regarding the fallout from SVB, a little good news can make a big difference to help sentiment. The data saw Asian equities and US futures point higher, along with AUD, EUR and GBP which are currently the strongest majors.
AUD/JPY 1-hour chart:
A bullish trend is developing on the 1-hour chart. Strong volumes accompanied yesterday’s rally to the high, and prices are continuing to drift higher today in Asia whilst respecting trend support. Prices are also above the 20 and 50-bar EMA’s around 89.50, a level which the bias remains above. Bulls will need to break prices above the round number of 90, and a resistance zone also sits nearby between 90.20/30 – but if we can get above here, it opens up a run for the highs around 91.
Cleary, we need appetite for risk to pick up today for risk pairs such as AUD/JPY to benefit, and the idea scenario would be higher yields, equities and commodity FX. But if sentient turns sour, a clear break beneath 89.50 would pique our bearish interest.
-- Written by Matt Simpson
Follow Matt on Twitter @cLeverEdge
How to trade with City Index
You can trade with City Index by following these four easy steps:
- Open an account, or log in if you’re already a customer
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
- Search for the market you want to trade in our award-winning platform
- Choose your position and size, and your stop and limit levels
- Place the trade
Related tags:
Latest market news
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
EUR/USD weekly outlook: Oil, inflation and NFP in focus
After coming under significant pressure in recent weeks, the EUR/USD came off its lows to finish the week on a positive note on Friday, albeit with only a mild rebound. That was not enough to prevent the exchange rate falling for the third consecutive week, as the US dollar and bond yields rallied across the board.
Gold Q4 2026 outlook: Resilience in the face of rallying dollar and yields
As we headed towards the latter stages of Q3 and into Q4, the Fed had just hiked rates in a hawkish FOMC meeting, while the likes of the ECB and BoJ had also tightened their respective policies. Oil prices remained elevated amid the prolonged US-Iran conflict. Meanwhile, bond yields were breaking out, and the dollar was higher across the board. Yet, remarkably, gold was still holding in the positive territory for the third quarter, even if it had weakened somewhat in September.
Oil Quietly Hands the Fed a Reason to Stay Hawkish
Oil prices and the U.S. dollar are both on the front foot as elevated energy costs feed Fed warnings that inflation may prove sticky.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.