The day ahead is likely to find China’s data the main focus after an eventful weekend.
Weaker than expected figures came from the US last Friday with core CPI seen at 1.9% year-on-year (YoY), missing the market’s 2.0% expectation. Retail sales, despite reverting to month-on-month (MoM) growth, had disappointed slightly at 0.4% MoM against the market’s 0.6% expectation. While the market largely expects US consumer prices to continue traversing close to the 2.0% YoY level for 2017, the slight miss had not been taken well by a market.
The reaction from the US dollar had been apparent with the dollar index sinking approximately 0.4% on Friday and was last seen trading at 99.20 levels into Friday morning. Pressure for the USD index also came from a stronger EUR/USD post a report from Germany highlighting that the ECB will start withdrawing their super expansionary policy. This had certainly raised the importance of the bloc’s central bank meeting in the upcoming month as the market could find tapering a re-emerging topic. For USD/JPY it had been a slide towards the 100-day moving average. The pressure could remain on the downside for the day ahead with a lack of key US data before Tuesday’s industrial production and housing starts update.
The fresh week finds the focus on a multitude of items including China’s summit, which could further shed light on globalisation plans by this Asian giant, and US data updates. That said, North Korea’s latest missile test may have set markets on a weak footing at the start of the week. Early movers in the region were mostly seen in red this morning, taking after the subdued US markets last week and likely shrouded by concerns with regards to the geopolitical developments.
For the day ahead, string of data is expected from Asia. The trading community, however, may find the key focus lying on China’s April retail sales, fixed assets investments and industrial production data due 10am Singapore time. Asian bourses have remained elevated in the past week and any disappointments from China’s data dump today could certainly find investors keen to take some money off the table.
Friday: S&P 500 -0.15%; DJIA -0.11%; DAX +0.47%; FTSE +0.66%