• AUD gains a bit while the NZ dollar loses steam after a streak of the Chinese data
  • Australian business conditions surged to their highest level on record helping soothe an adverse effect from disappointing Chinese figures
  • Tasmanian independent senator Lambie to quit parliament adding tensions to the Australian political scene
  • NZDUSD could be poised to break its notable support zone

The Asian session has been rather bleak as the major indices are trading ca. 0.5% lower on the day a moment before the close, the Japanese NIKKEI managed to close unchanged though. In terms of macroeconomic data we got several readings from the China’s economy which missed their estimates across the board. As a result the NZ dollar is declining 0.6% against the greenback, however the Australian dollar is gaining a touch more than 0.1%. The latter has been more resilient to the Chinese data on the back of its domestic release which saw business conditions surging to their highest level on record according to NAB.

link do file download linkAustralian business conditions improved markedly in the past month. Source: Macrobond, XTB Research

Let’s sum up that business conditions measured by NAB recovered from 14 to 21 meaning the highest value in history (since 1997). Besides, business confidence stayed unchanged at 8 as the prior print was revised up from 7 to 8. All in all it helped the AUD offset the feebler readings from the Chinese economy, nevertheless the NZ dollar did not get soothing data from its domestic economy and it’s slipping in early trading. The main cause could have been misses seen in China: retail sales came in at 10% yoy (10.5% yoy expected), industrial output showed 6.2% yoy (6.3% expected) while fixed asset investments excluding rural stayed at 7.3% yoy (YTD). Although the October’s data points to a little bit more sluggish growth in the fourth quarter, it’s unlikely that Chinese policymakers will step up their efforts aimed at shoring up the economy given significant financial risks.

Finally we got another story from Australia concerning politics and a possible larger reshuffle in the parliament. Namely the Tasmania independent senator Jacqui Lambie confirmed she would resign from the parliament because she was a dual citizen but she had vowed to press on with her political career. While Lambie’s departure is unlikely to affect the ability of Malcolm Turnbull’s government to pass legislation, it adds to the sense of chaos that’s engulfed parliament this year. Let us remind that the chaos began in July when two Greens senators resigned after discovering they held dual citizenship.

link do file download linkThe NZDUSD is approaching its key support area and once it’s broken, it could commence a deeper pullback potentially toward 0.6680. Notice that the pair wasn’t able to break its long term trend line in the past days, hence sellers might take control on the market again. Source: xStation