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

Contacts:
FXPRIMUS Support
[email protected]

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
DX World EXPO, LLC, a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Conference Guru has been named “Media Sponsor” of the 22nd International Cloud Expo, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. A valuable conference experience generates new contacts, sales leads, potential strategic partners and potential investors; helps gather competitive intelligence and even provides inspiration for new products and services. Conference Guru works with conference organizers to pass great deals to gre...
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and shared the must-have mindsets for removing complexity from the develop...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
The next XaaS is CICDaaS. Why? Because CICD saves developers a huge amount of time. CD is an especially great option for projects that require multiple and frequent contributions to be integrated. But… securing CICD best practices is an emerging, essential, yet little understood practice for DevOps teams and their Cloud Service Providers. The only way to get CICD to work in a highly secure environment takes collaboration, patience and persistence. Building CICD in the cloud requires rigorous ar...
Companies are harnessing data in ways we once associated with science fiction. Analysts have access to a plethora of visualization and reporting tools, but considering the vast amount of data businesses collect and limitations of CPUs, end users are forced to design their structures and systems with limitations. Until now. As the cloud toolkit to analyze data has evolved, GPUs have stepped in to massively parallel SQL, visualization and machine learning.
"Evatronix provides design services to companies that need to integrate the IoT technology in their products but they don't necessarily have the expertise, knowledge and design team to do so," explained Adam Morawiec, VP of Business Development at Evatronix, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
"ZeroStack is a startup in Silicon Valley. We're solving a very interesting problem around bringing public cloud convenience with private cloud control for enterprises and mid-size companies," explained Kamesh Pemmaraju, VP of Product Management at ZeroStack, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Large industrial manufacturing organizations are adopting the agile principles of cloud software companies. The industrial manufacturing development process has not scaled over time. Now that design CAD teams are geographically distributed, centralizing their work is key. With large multi-gigabyte projects, outdated tools have stifled industrial team agility, time-to-market milestones, and impacted P&L stakeholders.
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Enterprises are adopting Kubernetes to accelerate the development and the delivery of cloud-native applications. However, sharing a Kubernetes cluster between members of the same team can be challenging. And, sharing clusters across multiple teams is even harder. Kubernetes offers several constructs to help implement segmentation and isolation. However, these primitives can be complex to understand and apply. As a result, it’s becoming common for enterprises to end up with several clusters. Thi...