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ForexLive Asia FX news wrap: China Q3 GDP disappoints

Forex news for Asia trading on
Monday
18
October 2021

The
early focus of the session was New Zealand inflation data. Official
NZ
CPI data comes out once a quarter and
that for Q3 today was well above expectations, cementing another
brick in the wall for further Reserve Bank of New Zealand rate hikes
ahead. The NZD was marked higher on the data, topping for the session
just above 0.7100 before reverting back to more or less unchanged
over the following hours. The up and then down move for the NZD was
played out similarly in AUD, EUR and GBP; US equity markets (globex
index futures) also dropping
back.

After
the NZ data the wait was on for China’s economic growth data for Q3
and ‘Activity’ indicators for September. Economic growth in the
July – September quarter was disappointing, missing subdued
estimates amidst the construction slowdown and energy controls. Also
of impact of course were renewed coronavirus outbreaks and associated
restrictions, severe weather events, supply chain congestion and the
PBOC maintaining a relatively tight policy stance.

For
the activity data, industrial production showed disappointingly slow
growth. A key factor was a slump in steel output. The National
Development and Reform Commission of the People’s Republic of China
(NDRC)had sought to slow steel output and have succeeded. September
shopwed the weakest output since February of 2019 and production
is now down around 30% over the past four months. The
seasonally weak months of November and December are soon to come so a
bounce does not appear imminent.

Major
FX rates were little changed over the release of the Chinese data.

Oil traded higher on the session. BTC is higher awaiting the launch of futures ETFs:

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