Equities trade lower

The mood in Asia this morning was an extension of the US close on Friday, with equity markets and the US dollar extending declines.US indices slid between 0.27% and 0.46%, with the US30 index under-performing. Onshore Japanese markets were closed for a public holiday but futures markets were also lower. The surprise was the HK33 index which traded marginally in the black, despite reports of an anti-communist protest building.

Currencies less affected

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Currency markets were mixed in Asia, shrugging off the lackluster US payrolls report. The Australian dollar out-performed, rising 0.28% versus the US dollar and 0.39% versus the Japanese yen. AUD/USD is now trading at the highest level in almost a week while AUD/JPY has reached levels not seen since January 3.

AUD/USD Daily Chart

Steady China growth expected

With China’s fourth quarter GDP growth numbers due on Friday, local press is full of rumours and speculation (and possible leaks) about how strong the expansion will be. The China Daily reported that think tank CASS sees 6% growth for the full year 2020 while the China Securities Journal stated that another think tank also reckoned the economy would expand by 6% this year.

Meanwhile, news agency Xinhua reported that GDP growth in Beijing was 6.1%-6.2% in 2019, down from 6.6% in 2018. The latest Bloomberg survey has a median estimate of 6.0% growth for Q4 with a range of 5.9% to 6.3%. Q3 growth was 6.0% y/y.

UK production data on tap

The data calendar is very Europe-centric, with UK manufacturing and industrial production data the main event. Industrial production probably declined 0.2% m/m in November, according to the latest survey of economists, negating the 0.1% expansion seen in October. November’s goods trade deficit is expected to narrow to £11.6 billion from £14.5 billion in October.

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