Welcome!

News Feed Item

FXPRIMUS Market Brief of the Week: China 4Q Gross Domestic Product (GDP) Meets Expectations, but Growth Slows Down

SINGAPORE, SINGAPORE -- (Marketwired) -- 01/20/14 -- In FXPRIMUS' Market Brief of The Week for 20 January, the brokerage firm's Senior Economist, Jimmy Zhu, China's key data releases and how they are affecting worldwide markets.

Economic Insights

Slightly Lower Chinese GDP in 4Q Suggests That Growth Has Peaked in Near Term

This morning, China just released key data such as its 4Q GDP and December Industrial Production (IP) data. China's 4th Quarter GDP rose 7.7% YoY, 1.8% QoQ; December Industrial Output rose 9.7% YoY; December Retail Sales rose 13.6% YoY; economic growth slowed down slightly, as factory output and investment spending eased in the fourth quarter. It signalled that credit growth might take a hit this year due to the government's determination to curb shadow banking.

China has not released its 2014 growth target yet, and it is likely to be released next month based on past history. We estimate that the GDP target for this year will remain at 7.5%. In other words, the government could be using a gradual pace to reform the economy.

Markets took the releases negatively, as the recent indicators suggested that economy has been fading since middle of the 4Q. It is one of the reasons why the Aussie moved toward the level of 0.85. The employment data adds on further bets that the Reserve Bank of Australia (RBA) could lower its cash rate again during the first half of this year. Last week, Australian payrolls fell by 22,600 in December when consensus was a decent gain. Full-time payrolls recorded a big loss since 1992. The unemployment rate remains high at 5.8%, matching the highest level since June 2009.

Aussie failed to rebound although policy decisions on 5th November and 3rd December last year by the RBA was to "hold the rates", and Glenn Stevens said the exchange rate was "uncomfortably high", which was not so dovish compared to the middle of last year.

However, he jawboned the Aussie dollar lower as he thought the AUDUSD should be close to 0.85.

According to current consensus, here are the top four concerns on reasons that may push the Aussie dollar lower in 2014:

Growth engine in China was lost, especially the demand for the hard commodity from China. It should not be recognized as a positive catalyst for the Aussie dollar.

According to the swap market, there is a 48.6% chance that the RBA benchmark cash target will be lowered by June 2014. So long as easing expectations exist, the Aussie will remain under pressure even if there is no "rate cut" from the RBA.

The Australian economy will probably grow by 2.7% this year, with the expansion accelerating to 3% in 2015. The growth is well below the historical average growth in Australia, prompting the central bank to do more in the coming months.

The U.S. recovery should gradually remove the Federal Reserve (Fed) stimulus, bidding for a stronger USD.

Top news this week

New Zealand: Consumer Price Index (CPI) Q/Q.

I expect figures to come in at 0.3% (previous figure was 0.9%).

HSBC flash China manufacturing Purchasing Managers' Indexes (PMI)

I expect figures to come in at 50.2.

German flash China manufacturing PMI

I expect figures to come in at 54.6.

Trade Recommendation

Long NZDUSD at 0.8220

On the H1 chart, NZDUSD is moving into its key support level at 0.8220. Momentum for the Aussie is still to the downside, hence the crowded AUDNZD shorts could offer some support to the Kiwi's upside. Chinese reform to increase the personal wages also benefits the New Zealand's Dairy exports activities. Additionally, monetary policy for New Zealand is supportive of a stronger Kiwi as the central bank might raise the rates in 1H this year.

We will go long once prices retrace further to our support level at 0.8220. A stop loss of 50 pips is placed. We will have two targets on this trade, exiting the first position at 0.8270 and the second one at 0.8320.


Entry Price = 0.8220
Stop Loss = 0.8170
1st Profit = 0.8270
2nd Profit = 0.8320

NZDUSD H1 Chart: http://media3.marketwire.com/docs/fxpnzusd0120.jpg.

Source: Bloomberg

ABOUT FXPRIMUS

FXPRIMUS offers retail traders a level of trade execution, service quality and fund safety that are normally reserved only for the largest investors. Serving traders in 205 countries across 6 continents, FXPRIMUS combines an unmatched level of fund safety with regular independent audits of company financials and Straight Through Processing, top notch execution with tight spreads, prompt and responsive customer support, ISO 27001 certification in Information Security, ISO 9001:2008 certification in Quality Management and an industry-leading trader toolset that includes free access to powerful trader tools. FXPRIMUS truly is The Safest Place To Trade.

Add to Digg Bookmark with del.icio.us Add to Newsvine

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
UpGuard has become a member of the Center for Internet Security (CIS), and will continue to help businesses expand visibility into their cyber risk by providing hardening benchmarks to all customers. By incorporating these benchmarks, UpGuard's CSTAR solution builds on its lead in providing the most complete assessment of both internal and external cyber risk. CIS benchmarks are a widely accepted set of hardening guidelines that have been publicly available for years. Numerous solutions exist t...
"We're bringing out a new application monitoring system to the DevOps space. It manages large enterprise applications that are distributed throughout a node in many enterprises and we manage them as one collective," explained Kevin Barnes, President of eCube Systems, in this SYS-CON.tv interview at DevOps at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Choosing the right cloud for your workloads is a balancing act that can cost your organization time, money and aggravation - unless you get it right the first time. Economics, speed, performance, accessibility, administrative needs and security all play a vital role in dictating your approach to the cloud. Without knowing the right questions to ask, you could wind up paying for capacity you'll never need or underestimating the resources required to run your applications.
SYS-CON Events announced today that LeaseWeb USA, a cloud Infrastructure-as-a-Service (IaaS) provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LeaseWeb is one of the world's largest hosting brands. The company helps customers define, develop and deploy IT infrastructure tailored to their exact business needs, by combining various kinds cloud solutions.
Adding public cloud resources to an existing application can be a daunting process. The tools that you currently use to manage the software and hardware outside the cloud aren’t always the best tools to efficiently grow into the cloud. All of the major configuration management tools have cloud orchestration plugins that can be leveraged, but there are also cloud-native tools that can dramatically improve the efficiency of managing your application lifecycle. In his session at 18th Cloud Expo, ...
StackIQ has announced the release of Stacki 3.2. Stacki is an easy-to-use Linux server provisioning tool. Stacki 3.2 delivers new capabilities that simplify the automation and integration of site-specific requirements. StackIQ is the commercial entity behind this open source bare metal provisioning tool. Since the release of Stacki in June of 2015, the Stacki core team has been focused on making the Community Edition meet the needs of members of the community, adding features and value, while ...
The competitive landscape of the global cloud computing market in the healthcare industry is crowded due to the presence of a large number of players. The large number of participants has led to the fragmented nature of the market. Some of the major players operating in the global cloud computing market in the healthcare industry are Cisco Systems Inc., Carestream Health Inc., Carecloud Corp., AGFA Healthcare, IBM Corp., Cleardata Networks, Merge Healthcare Inc., Microsoft Corp., Intel Corp., an...
SYS-CON Events announced today the Kubernetes and Google Container Engine Workshop, being held November 3, 2016, in conjunction with @DevOpsSummit at 19th Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA. This workshop led by Sebastian Scheele introduces participants to Kubernetes and Google Container Engine (GKE). Through a combination of instructor-led presentations, demonstrations, and hands-on labs, students learn the key concepts and practices for deploying and maintainin...
Using new techniques of information modeling, indexing, and processing, new cloud-based systems can support cloud-based workloads previously not possible for high-throughput insurance, banking, and case-based applications. In his session at 18th Cloud Expo, John Newton, CTO, Founder and Chairman of Alfresco, described how to scale cloud-based content management repositories to store, manage, and retrieve billions of documents and related information with fast and linear scalability. He addres...
Is your aging software platform suffering from technical debt while the market changes and demands new solutions at a faster clip? It’s a bold move, but you might consider walking away from your core platform and starting fresh. ReadyTalk did exactly that. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, will discuss why and how ReadyTalk diverted from healthy revenue and over a decade of audio conferencing product development to start an innovati...
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
Ovum, a leading technology analyst firm, has published an in-depth report, Ovum Decision Matrix: Selecting a DevOps Release Management Solution, 2016–17. The report focuses on the automation aspects of DevOps, Release Management and compares solutions from the leading vendors.
Continuous testing helps bridge the gap between developing quickly and maintaining high quality products. But to implement continuous testing, CTOs must take a strategic approach to building a testing infrastructure and toolset that empowers their team to move fast. Download our guide to laying the groundwork for a scalable continuous testing strategy.
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...