Australian Employment Lower - Brisk sell-off reverses as Risk Sentiment improves

This evening of Wednesday March 7th 2012 at 19:30 EST (Thursday March 8th at 00:30 GMT) the monthly Employment figures were released from Australia. This figure can affect the price of the Australian Dollar forex pairs quite alot, but sometimes the data is delayed arriving accross the various economic news delivery platforms due the method this number is released in Australia.

Anyhow there is still opportunities here as it is still quick and often the moves are quite big so even if you miss the first 20-30 pips you can still get a chuck. Sometimes the whole move occurs in the 1st minute and then just goes flat. A few hours after going side-wise it can then continue the move or retrace.

During Wednesday the markets started to find a risk-on bid after several days of Risk-off selling pressure, pretty much since Wednesday last week on February 29th. That was the end of the month, Beranke had made his congressional testimony and there was a lower ISM data print from the USA.

So despite the bad Australian GDP yesterday, and then today's bad Employment data, the Australian dollar after of course selling off quite a bit in the intial news reaction, turned around and rallied over night as the markets turned bad to a positive risk sentiment mode. Alot of it is due to a higher level of participation in the Greek PSI Bond Swap deal.

Here is the data:

Australia Unemployment Rate
Estimates -> Median: 5.0k Average: 3.5k Low: -20.0k High: +17.0k
Actual: -15.4k Prior: +46.3k Revised: +46.2k

Australia Employment Change
Estimates -> Median: +5.2% Average: +5.2% Low: +5.1% High: +5.4%
Actual: +5.2% Prior: +5.1% No Revision

Australia Full Time Employment Change
Actual: 0.0k Prior: +12.3k Revised: +15.3k

Australia Part Time Employment Change
Actual: -15.4k Prior: +34.0k Revised: +30.9k

Australia Participation Rates
Estimates -> Median: 65.3% Average: 65.3% Low: 65.2% High: 65.5%
Actual: 65.2% Prior: 65.3% No Revision

This is the 30 second chart of the AUDUSD

This is the 30 second chart of the AUDJPY

Here is the 30 second chart of the EURAUD

This is the 30 second chart of the AUDNZD, this one is interesting because this one held the lows much longer than the other pairs, and actually continued to drop into the next day. This is important to be aware of in the context of the broader risk on/off sentiment driving the markets, coupling the right currencies against each others can offset that dynamic parameter.

Certainly if you are using the news to trade a bit longer term, this is necessary. First to be aware of the overall types of headlines driving the market moves and then to choose the right pair. Here is the same AUDNZD pair on the 5 minute time frame thru the next several hours after the release.

Here is the 5 minute chart of the AUDUSD for comparison.

Australia GDP - much lower than expected sharp Australian Dollar sell off

Last night at 17:30 EST on March 6th 2012 (00:30 GMT on March 7th) and technically the morning on March 7th in Australia where the data was released, the quarterly GDP figures were release for Australia. This data only comes out once a quarter and thus it is usually a good news event to trade because there is a big likelyhood for a surprise, unlike the GDP from the UK where prelimin, advance and final releases make things rather predictable.

This data came out much lower, and the Australian Dollar fell quite sharply. The pair is really the darling currency because it has one of the best yields of any of the developed economies. The fall was rather brief however and by the start of the European session the pair had mostly regained the loss.

Here is the data:


Australia GDP (QoQ)
Estimates -> Median: +0.8% Average: +0.8% Low: +0.4% High: +1.1%
Actual: +0.4% Prior: +1.0% Revised: +0.8%

Australia GDP (YoY)
Estimates -> Median: +2.4% Average: +2.4% Low: +2.1% High: +2.8%
Actual: +2.3% Prior: +2.5% Revised: +2.6%

Here are the 30 second charts of the AUDUSD, AUDJPY and EURAUD forex pairs which show the reaction in price after the deviation caused a surprise against what was expected from my analysts.

Australia RBA Cash Target - AUDUSD Drops on RBA statement of possible further easing

Last night Monday February 5th 2012 at 22:30 EST (03:30 GMT on Tuesday February 6th) the RBA made their decision on hold Interest Rates steady at 4.25%. This was expected by all analysts unlike last month where all but 3 of the 27 surveyed by Bloomberg expected a cut. The Australian Economy seems to be holding up well enough, despite a small slowdown in China, however the RBA is watching affairs unfold in Europe and is aware that this will affect the global economy and expressed their intention to lower rates if things get worse.

Here is a link to their Statements

So the market took this as a cue that the next move from the RBA could still be a cut and thus the Australian Dollar Forex pairs fell.

Here is a 1 minute chart of the AUDUSD forex pair:

and this is the 1 minute chart of the AUDJPY forex pair

Australian Employment - All good, nice spike, no follow thru in risk-off market

Last night at 00:30 GMT on February 16th 2012 (19:30 EST Feb 15th) the Employment figures were released out of Australia. Recently the Full time and Part time components have come with expectations. There have been times when the deviation on Net Employment Change has not come from Full-Time jobs which has actually gone the other way. This time all the figures lined up. There was a good strong spike, and then the start of a retracement style afterspike, however with all the risk aversion due to the further delays in coordinating the next Greek bailout, the Australian Dollar was unable to follow thru with a continued move higher.

Here is the data:

Australia Employment Change
Estimates- Median: +10.0k Average: +12.4k Range: -10.0k to +36.0k
Actual: +46.3k Prior: -29.3k Revised: -35.6k

Australia Unemployment Rate
Estimates- Median: +5.3% Average: +5.3% Range: +5.2% to +5.5%
Actual: +5.1% Prior: +5.2% No Revision

Australia Full Time Employment Change
Estimates- Median: 0.0k Average: 0.0k Range: -10.0k to +10.0k
Actual: +12.3k Prior: +24.5k Revised: +24.0k

Australia Part Time Employment Change
Estimates- Median: +7.5k Average: +5.8k Range: -20.0k to +20.0k
Actual: +34.0k Prior: -53.7k Revised: -59.6k

Australia Participation Rates
Estimates- Median: +1500k Average: +1062k Range: -1500k to +2700k
Actual: -171k Prior: +304k No Revision

Australia RBA Foreign Exchange Transactions
Actual: 383M Prior: 737M No Revision

First the 1 minute chart of the AUDUSD forex pair:

Also the 1 minute chart of the AUDJPY, another good pair to trade on Australian economic news:

Also the EURAUD 5 minute chart which show that even this pair did retrace thru the asian session.

One pair which was able to hold its gains, but not make any more significant highs was the AUDNZD, here is the 5 minute chart:

Chinese Imports Much Lower - Australian Dollar Sells off

Overnight during the Asian Session on Febrary 9th 2012 at 22:04 EST(February 10th 2012 at 3:04 GMT) the Trade Balance, Imports and Exports data was released from China. It generally had lower estimates but the Import data came out much lower than expectations. As Australia sells alot of commodities to China the Australian Dollar sold off.

Here is the data:

China Exports YoY%
Estimates- Median: -1.4% Average: -0.2% Range: -10.0% to +8.4%
Actual: -0.5% Prior: +13.4% No Revision

China Imports YoY%
Estimates- Median: -3.6% Average: -2.4% Range: -14.0% to +11.0%
Actual: -15.3% Prior: +11.8% No Revision

China Trade Balance (USD)
Estimates- Median: $10.40B Average: $9.77B Range: -$0.43B to +$21.30B
Actual: +27.28B Prior: +$16.52B No Revision

Here is the 5 minute chart of the AUDUSD forex pair. The move lower actually started about 23:00 GMT or 18:00 EST just ahead of the Tokyo open, so there may have been some anticipation of this. After the data was released the pair sold off another 60-70 pips:

Here is a 1 hour chart of the EURAUD trade. Going short this pair is the Carry Trade of choice at the moment, because of problems in Europe and still better interest rates in Australia of 4.25%. Europe is just 1% but even though there is lower interest rates elsewhere this gives extra appreciation due to the European Soverign Debt Crisis.

Although this retacement looks quite good if you look at the Daily Chart you see that this is only a shallow retracement relative to the longer term:

Australia RBA Cash Target - Unexpectedly Hold Rates lead to rally in AUDUSD

Last night February 6th at 21:30 EST (02:30 GMT on February 7th) the RBA released their Interest Rate decision. Out of the 27 analyst estimates only 3 expected the RBA to hold rates steady at 4.25%. The other 24 expected them to cut 25 basis points to 4.00%. They surprised the market by not cutting interest rates and instead holding rates steady at 4.25%. The AUDUSD forex pair rallied over 120 pips on the news. Other Australian Dollar pairs: AUDJPY, EURAUD has similar gains.

The past 2 meetings the RBA has cut rates by 25 basis points each meeting. The analysts were roughly split in estimating they would do these cuts each time with about half predicting a cut and the other half predicting the RBA to hold. This time nearly all the analysts jumped on the band wagon and predicted a cut. However these predictions were quite backward looking as since the last FOMC meeting on January 25th 2012 and the NFP on this past friday, market sentiment has in general been alot better. An article appeared from Sydney Morning Herald just before Sunday night's Retail Sales report about the likelihood of a RBA rate cut diminishing, however no analysts modified their expectations over the next day before the RBA announcement.

Here is the 1 minute chart of the AUDUSD:

Here the 5 minute charts of AUDUSD and EURAUD. EURAUD dropped on the news but during the European Session some positive developments on situation in Greece turned the pair aroung. The AUDJPY got a further lift when the Japanese Yen started to weaken through out the day:

US NonFarm Payroll - Much Higher Risk-On except for European Currencies and Gold

This Friday, February 3rd 2012 at 8:30 EST (13:30 GMT) the montly payroll data from the USA was released. This is basically an indication of the Employment Situation and is the most well known and widely watched piece of economic data known to the market. Almost every market instrument will move based on this data. If there are jobs in the USA then there will be confidence and Americans will have money in the pockets to buy stuff...whether houses from the large stock available or things fabricated in China.

Earlier in the week on Wednesday the ADP data came out slightly lower. This is a smaller sample but it gives an advanced indication of what is likely to happen with the NonFarm Payroll Number.
There are other economic data figures which attempt to gauge the employment situation in the USA. The weekly Initial Jobless Claims for instance has been coming out below 400k since December 2011. This broke the low seen in February 2011 and the number has been consistently at around 360k now. The Challenger Job Cuts was higher however, which indicates more people were laid-off from their jobs. The Employment Component of ISM Manufacturing PMI was also slightly lower, but Consumer Confidence definately has been up. Anyhow despite all these advanced readings on the day there is little you can do to predict what the NonFarm Payroll number will be unless you have special connections or something. This time there was an upward surprise. Here is the data:

US Change in Nonfarm Payrolls
Estimates- Median: +140k Average: +146k Range: +95k to +225k
Actual: +243k Prior: +200k Revised: +203k

US Change in Private Payrolls
Estimates- Median: +160k Average: +162k Range: +110k to +250k
Actual: +257k Prior: +212k Revised: +220k

US Change in Manufacturing Payrolls
Estimates- Median: +12k Average: +14k Range: +9k to +25k
Actual: +50k Prior: +23k Revised: +32k

Unemployment Rates
Estimates- Median: +8.5% Average: +8.5% Range: +8.3% to +8.7%
Actual: +8.3% Prior: +8.5% No Revision

Average Hourly Earning MOM All Emp
Estimates- Median: +0.2% Average: +0.2% Range: 0.0% to +0.3%
Actual: +0.2% Prior: +0.2% Revised: +0.1%

Average Hourly Earning YOY All Emp
Estimates- Median: +1.9% Average: +1.9% Range: +1.8% to +2.0%
Actual: +1.9% Prior: +2.1% No Revision

Average Weekly Hours All Employees
Estimates- Median: 34.4 Average: 34.4 Range: 34.3 to 34.5
Actual: 34.5 Prior: 34.4 Revised: 34.5

Change in Household Employment w/Pop
Actual: 847 Prior: 176 No Revision

Underemployment Rate
Actual: 15.1% Prior: 15.2% No Revision

So where to start. Of course there were some nice moves, however while the commodity currencies forex pairs rallied the european currencies sold off. Gold sold off while Crude rallied. We will start with the Stock Index Futures, these are actually the most reliable to trade on US news in general these days. Here is the 1 minute chart of the Emini S&P 500 Future and the DAX Future:

After the Stock Index futures the CADJPY or another Commodity Currency like Australian dollar or New Zealand versus the Japanese Yen, AUDJPY or NZDJPY. Here is the 10 second chart of the CADJPY:

and this is the 1 minute chart of the CADJPY to show more of the move:

It is always good to keep an eye on the USDJPY, although the moves are not always so many pips. Here is the 10 second chart of the USDJPY:

and a 1 minute chart of the USDJPY to show more of the move:

So now a 30 second chart of the EURUSD will show how it moved down on the release. It did briefly run up about 30 pips but then dropped 120 pips:

In contrast to the AUDUSD which spiked up, pulled back, and kepted rallying. The GBPUSD, USDCHF, USDNOK followed the Euro by weakening against the Dollar, only the Swedish Krona escaped the sell-off in European Currencies. The NZDUSD, USDCAD, USDZAR and Asian Currencies all rallied against the US Dollar much like this Australian Dollar did in this 1 minute chart of AUDUSD:

Also here is the 1 minute chart of Gold. It was whippy initially, basically it lost some of its shine as a safe-haven when better employment in the USA meant risk appetite. Interesting to note shifting correlations, Crude Oil did rally in contrast:

Australian Trade Balance & Building Approvals - Nice Move up to retest earlier highs

Tonight on 1st Febrary at 19:30 EST (00:30 GMT Feb 2nd) the Trade Balance figures were released out of Australia. Although the deviaiton was not that big the AUDUSD reacted very nicely. It appears this news is in focus, perhaps it indicates growth in Asia which the market is concerned about since there is a worry china might not have such a soft landing as hoped and their GDP is at 8.9% after being above 10%. Australia provides alot of raw materials to china so this one is an important forward looking indicator for china. Also released at the same time was Building Approvals, not so sure this one is so important as it did come out lower but still the AUDUSD rallied nicely for +45 pips to retest the highs set earlier during the New York Session.

Here is the figures:


Australia Trade Balance
Estimates- Median: 1200M Average: 1301M Range: 500M to 2000M
Actual: 1709M Prior: 1380M Revised: 1343M

Australia Building Approvals (MoM)
Estimates- Median: +2.0% Average: +2.1% Range: -5.0% to +10.0%
Actual: -1.0% Prior: +8.4% Revised: +10.1%

Australia Building Approvals (YoY)
Estimates- Median: -22.1% Average: -22.4% Range: -27.0% to -18.9%
Actual: -24.5% Prior: -18.9% Revised: -17.5%

Here is a 1 minute chart of the AUDUSD, the blue arrow shows the time of the release, it does appear like a bit of movement started 2-3 minutes beforehand:

Here is a 5 minute chart of the former highs from the New York session being broken by the run up caused from the news. The sell off from the highs occurred when expectations for an agreement on the Greek PSI moved from hours to days to sometime next week:

US GDP Advanced for Q4 2011 - High Expectations slight disappointment but good moves

This friday January 27th 2012 at 8:30 EST (13:30 GMT) the Advanced or 1st reading of GDP for Q4 2011 was released from the USA. The expectations for this were quite high, considering that the Final Reading for Q3 was +1.8%, to jump to +3.0% is nearly doubling growth. As the expectation was quite high some probably considered that a small miss of the expectation would not cause a major sell off, but in the end it did provide a decent move down, although later on in the session things rebounded and there was a rally into the close for the week. Alot of these was do to good headlines about a deal on the deal with PSI about a haircut on Greek Debt, that an agreement was close.

Anyway here is the data:

US GDP QoQ (Annualized) Advanced Q4 2011
Estimates- Median: +3.0% Average: +3.0% Range: +2.4% to +4.5%
Actual: +2.8% Prior: +1.8% No Revision
US GDP Price Index
Estimates- Median: +1.9% Average: +1.7% Range: +0.6% to +2.6%
Actual: +0.4% Prior: +2.6% No Revision
US Core PCE QoQ
Estimates- Median: +0.9% Average: +1.1% Range: +0.8% to +2.4%
Actual: +1.1% Prior: +2.1% No Revision
US Personal Consumption
Estimates- Median: +2.4% Average: +2.4% Range: +1.2% to +3.6%
Actual: +2.0% Prior: +1.7% No Revision

Here are some charts then, first is the Emini S&P 500 Future 1 minute chart:

Also another option for stock index futures is the DAX, or the FTSE, any major index will move with the EMini and DOW on US news. I like the DAX:

In Forex the CADJPY follows the Stock Indices quite well. Any Commodity Currency (AUD,NZD,CAD...or even ZAR or NOK probably will have to review those charts) versus the Japanese Yen will generally follow the stock indices, sometimes Canadian News comes out at the same time as US News so you have to watch out for that. This is the 10 second chart of the CADJPY:

Last month the USDJPY did not follow the lower print and actually moved up (only a small amount of pips). This time it did follow everything down, but normally this pair is avoided since it really doesn't move that much most of the time. Here is the 30 second chart of the USDJPY forex pair:

Actually it was risk-off across the board the USD dollar rallied as well with AUDUSD, NZDUSD, GBPUSD and EURUSD selling off. Although the JPY did appreciate more than the USD on this risk-off move as can be seen by the USDJPY chart above. Here are 2 more charts of AUDUSD and NZDUSD, this time 5 minute chart and you can see more price action. Later on in the US Session as mentioned the deal on PSI haircuts looked close also 90 minutes after GDP the University of Michigan Consumer Sentiment figures were released at 10:00 EST (15:00 GMT). This data has rebounded nicely since some bad prints during August 2011. Now the figure is coming back up to 2 year highs. Here is that data:

US U. of Michigan Confidence
Estimates- Median: 74.0 Average: 74.3 Range: 72.5 to 76.0
Actual: 75.0 Prior: 74.0 No Revision

Finally these 2 charts are GMT+2 and also the Green line at the top is the R1 pivot, which AUDUSD tagged perfectly and sold off from, while NZDUSD overshot a bit. The Red Arrow is the release of GDP while the Blue Arrow is the release of U. of Michigan Confidence. The NZDUSD found support right on the Yellow horizontal line which is the Daily Central pivot:

Australian CPI - Conflict causes whipsaw which resolves higher

This Tuesday evening of January 24th at 19:30 EST (or 00:30 GMT on January 25th) the CPI figures were released from the Australian Bureau of Statistics. This is released quarterly like it is for New Zealand and unlike the USA or UK where it comes out monthly. Probably because it is only quarterly it seems to move the price of the Australian Dollar quite a bit. This data did become a bit tricky starting in 2008 when it split up into 3 sets of data with the Headline, Trimmed Mean and Weighted Mean. So 6 figures plus there revisions makes alot of numbers to look at. The past few releases all these have lined up more or less. In october the Headline was flat as expected, but the positive deviations on Trimmed & Weighted Mean lead to a rally in AUDUSD forex pair. This time we saw a -0.2 on the Headline and positive deviations on Trimmed Mean.

Here are the figures:

Australia Consumer Prices QoQ
Estimates- Median: +0.2% Average: +0.2% Range: -0.2% to +0.5%
Actual: 0.0% Prior: +0.6% No Revision

Australia Consumer Prices YoY
Estimates- Median: +3.3% Average: +3.2% Range: +2.8% to +3.6%
Actual: +3.1% Prior: +3.5% No Revision

Australia RBA Timmed Mean QoQ
Estimates- Median: +0.5% Average: +0.5% Range: +0.2% to +0.7%
Actual: +0.6% Prior: +0.3% Revised: +0.4%

Australia RBA Timmed Mean YoY
Estimates- Median: +2.4% Average: +2.4% Range: +2.1% to +2.6%
Actual: +2.6% Prior: +2.3% Revised: +2.4%

Australia RBA Weighted Mean QoQ
Estimates- Median: +0.5% Average: +0.5% Range: +0.2% to +0.7%
Actual: +0.5% Prior: +0.3% Revised: +0.4%

Australia RBA Weighted Mean YoY
Estimates- Median: +2.4% Average: +2.4% Range: +2.1% to +2.6%
Actual: +2.6% Prior: +2.6% Revised: +2.7%

The AUDUSD forex pair initially spiked down on the lower deviation on the Headline figure but then whipped around back higher on the better Trimmed Mean, there were also downward revisions. This seems to indicate that Trimmed mean is more important. Here is the a 5 second chart of the move on AUDUSD:

Basically the market probably expected a lower CPI figure to give the RBA move room to cut rates in February as most analyst now expect, this mixed CPI figure brings some doubt now to the likelyhood of that outcome. Here is a 30 second chart to show the way the AUDUSD forex pair resolved higher:

Finally the 5 minute chart of the AUDUSD forex pair shows how it came up to test the R1 pivot thru the asian session, bounced off, retested and slightly broke the former highs during the European Session before moving down on bad headlines about Greece & Portugal later in the European morning:

Currency COT Report for January 20th 2012

Australian Employment - Significant Lower Drop on Change but Rate conflict

This evening of January 18th at 19:30 EST and well 00:33 on January 19th in GMT land, the Employment figures for Australia were released. What was interesting about this release was for the first time Bloomberg included Estimates for Full Time & Part Time Employment Change. In past months we only got the prior months figure. This is important because since May 2011 there we have seen how the price reaction of the Australian Dollar can be influeced on whether the main Net Employment Change figure is composed of growth or contraction due to Part-time or Fulltime growth or decline. Obviously an increase in Employment change due to Parttime jobs is less great than if the increase comes from Full-time Jobs...Likewise if a drop in Net Employment Change is due to a loss in Part-time Jobs but Full-time Jobs actually grew then this is not so bearish, as it was only a matter of there being more loss of Part-time Jobs than growth of Full-time Jobs. This situation has confused many news traders who did not see the Part-time and Full-time break down.

Anyway now we got estimates, although there are only 8 analysts providing estimates for Part-time and Full-Time Employment change while there are 23 analysts providing surveys for the main Net Employment Change and Unemployment Rate.

There was a big drop in Employment Change, very bearish for Aussie Dollar, but the Unemployment Rate was also lower, which is good. Part-time Change dropped by -45k while Full-time Change actually grew by +5.7k, so basically a conflict. AUDUSD reacted to the dip in the Net Change and also a deviation of just -0.1 is not very significant for Unemployment Rate, but the drop in the Change figure is quite big.

Anyway here are the figures:


AU Employment Change
EStimates- Median: +10.0k Actual: +7.6k Range: -10.0k to +25.2k
Actual: -29.3k Prior: -6.3k Revised: -7.5k

AU Unemployment Rate
EStimates- Median: 5.3% Actual: 5.3% Range: 5.2% to 5.4%
Actual: 5.2% Prior: 5.3% Revised: 5.2%

AU Fulltime Employment Change
EStimates- Median: +18.8k Actual: +17.5k Range: -5.0k to +40.0k
Actual: +24.5k Prior: -39.9k Revised: -39.4k

AU Parttime Employment Change
EStimates- Median: -8.8k Average: -6.8k Range: -35.0k to +20.0k
Actual: -53.7k Prior: +33.6k Revised: +31.9k

AU Participation Rate
EStimates- Median: 65.5% Actual: 65.5% Range: 65.4% to 65.6%
Actual: 65.2% Prior: 65.5% No Revision

Here is a 10 second chart of the AUDUSD pair...it dropped quite steeply in the intial reaction, about 50 pips, but then bounced 30 pips back up as the Unemployment rate conflicted. Also the way this data is released from Australia means this one often comes out slow with the different constituents trickling out rather than all arriving thru the wire at the same time...I have heard that the data comes thru a voice on the phone and has to be transfer into text data for transmission over the wires...seriously in the 21st century?

Finally a 5 minute chart of the move thru the asian session into the European open where the 61% fib of the move down did provide a little bounce, but later in the session some good results from Bank or America and Morgan Stanley brought some risk-on sentiment and the audusd forex pair rallied more:

Higher Chinese GDP, Retail Sales & Industrial Production leads to Broad Rally in markets

Overnight at 2am GMT (9pm EST Jan 16th 2012) a bunch of figures were expected from China. There has been some worries that China would start to contract and this would not a good development with a debt crisis in Europe. About 10 or 11 minutes before the release the Xinhua news agency released the GDP data before it came out over the wire. There were also Retail Sales and Industrial Production numbers, all of which came out as expected or higher. This has at least for now pushed away fears of a contraction in China although the GDP is lower for the 10% it was in 2010 and approx. 9.5% area thru most of 2011.

Here are the figures:


China Industrial Production YTD YoY
Estimates: Median +13.8% Average +13.8% Range +13.8% to +13.9%
Actual: +13.9% Prior: +14.0% No Revisions

China Industrial Production (YoY)
Estimates: Median +12.3% Average +12.4% Range +11.8% to +13.6%
Actual: +12.8% Prior: +12.4% No Revisions

China Real GDP YTD (YoY)
Estimates: Median +9.2% Average +9.2% Range +8.9% to +9.4%
Actual: +9.2% Prior: +9.4% No Revisions

China Real GDP (QoQ)
Actual: +2.0% Prior: +2.3% No Revisions

China Real GDP (YoY)
Estimates: Median +8.7% Average +8.8% Range +8.5% to +10.2%
Actual: +8.9% Prior: +9.1% No Revisions

China Retail Sales YTD YoY

Estimates: Median +17.0% Average +17.0% Range +17.0% to +17.1%
Actual: +17.1% Prior: +17.0% No Revisions

China Retail Sales (YoY)

Estimates: Median +17.2% Average +17.3% Range +16.2% to +17.1%
Actual: +17.1% Prior: +17.0% No Revisions

China Fixed Assets Inv Excl. Rual YTD YoY

Estimates: Median +24.1% Average +24.0% Range +24.4% to +24.4%
Actual: +23.8% Prior: +24.5% No Revisions

The Australian Dollar is the best pair to trade on Chinese news due to the fact that Australia is a major trading partner and supplies China with alot of Raw Materials required for production of goods. Here is the first chart of the AUDUSD 1 minute which shows the reaction to the release. Notice that the move started 10 minute before the official 9pm EST release...it then chopped for awhile before leading on to rally further as the middle east and then Europe woke up and arrived at their trading desks.

and here is a 5 minute chart of the AUDUSD which shows some Key Levels from the lead into the Tokyo Open on January 17th 2012...it bounced off the 1.0300 round figure which was Daily Central Pivot (Yellow Line at the bottom of the chart)...the AUDUSD forex pair then moved back up to the 1.0336 area where the turquoise line is. This is the 61% fibonacci retracement of the October 27th high of 1.0652 to the November 23rd low of 0.9663. This level had been tested during the Monday January 16th 2012 trading session and bounced off it back to the 1.0300 round figure. When the Xinhua News Agency announced the GDP figures 10 minutes early this fib aread was broken and the pair pierced the R1 Daily Pivot as the figures hit the main wires at 9pm...this Pivot did stall the pair for awhile until more bids came in 20 minutes after the release, moving it to the R2 Pivot which it overshot with a strong candle but did fold over a bit until more bids came in to take it over the 1.0400 handle, this time with the R2 Pivot supporting the pair from below, giving it the foundation to lead the assault on cracking the 1.0400 figure. Europe opened and the pair tagged the 1.0433 area which is the 61% of the larger swing of the July 27th high of 1.1080 to the October 4th 0.9387 as German ZEW Economic Sentiment improved and not bad Bond auctions from Spain, Greece and Belgium occurred. More detail on ZEW in next post.

US GDP Final for Q3 2011 - lower GDP but Initial Jobless Claims lower which is good

Today at 8:30 EST 13:30 GMT the GDP figures for the USA came out. This is the final reading for the 3rd quarter of 2011 and thus are a bit dated. These came along with the weekly jobless figures which last week broke the critical 400k bull/bear line and printed 366k coming back down to the April lows, which is where things were before fears of a double dip grew during the summer of 2011. There was also personal consumption and pce core, the fed's perfered inflation indicator.

It is rare for there to be such a range of estimates for a final release of GDP but after the Advanced of 2nd reading of Q3 back in November where the figure came out at 2.0% below the 2.5% expected, the range of analysts estimates grew quite wide...wider in fact than last month's estimates which had a 0.9 range this month had a 1.3 range.

The IJC did come in slightly lower this week than last week, not alot but it is positive that it maintained the lower reading from last week into this one. The GDP was -0.2 deviation below the median estimate of all analysts surveyed by bloomberg and the risky assets did sell off. Here the figures:



US GDP QoQ Annualized - Final Q3 2011
Estimates: Median +2.0%, Average +2.0%, Range +1.5% to +2.8% (majority +1.8% to +2.2%)
Actual: +1.8% Prior: +2.0% No Revision


US Personal Consumption
Estimates: Median +2.3% Average +2.2% Range +1.5% to +2.4% (majority +2.2% to +2.4%)
Actual: +1.7% Prior: +2.3% No Revision

US GDP Price Index
Estimates: Median +2.5% Average +2.5% Range +2.0% to +2.5% (majority +2.5)
Actual: +2.6% Prior: +2.5% No Revision

US Core PCE q/q
Estimates: Median +2.0% Average: +2.0% Range +2.0% to +2.0%
Actual: +2.1% Prior: +2.0% No Revision

US Initial Jobless Claims w/w
Estimates: Median +380k Average: +378k Range +355k to +400k
Actual: +364k Prior: +366k Revised: +368k

US Continuing Claims w/w
EStimates: Median +3600k Average +3602k Range +3560k to +3650k
Actual: +3546k Prior: +3603k Revised: +3625k

Now for some charts...what was interesting is looking at last months reaction to the -0.5 deviation lower from +2.5 expected to the +2.0 of the actual release. Normally there would have been a good move lower on the Japanese Yen crosses but instead we saw broad US Dollar strength on risk aversion. I know it might not make sense that the US Dollar would strengthen on bad data from the USA but when markets get bad data they respond by dumping riskier high yeild assets and buying safe US bonds...it is the largest safest market in the world, but they don't yeild so much. First chart is the Australian Dollar versus US Dollar AUDUSD 10 second chart:

next is the CADJPY, which has a high correlation to stock indices...last month the US GDP was released with Canadian Retail Sales at the same time, which was higher while GDP was lower, so it was not a good pair to trade last month, this month it was good:

Nice to look at the DAX chart, this is the index for the German stock market, but it moves nicely on US news as well. This is the 1 minute chart:

should include the Emini S&P 500 to be complete..1 minute chart:

and finally the USDJPY is included because this was the safest pair to trade on US news, this is because you cannot always be sure that risk-on will mean selling US Dollars and risk-off will be buying US Dollars...sometimes risk-on is selling the Japanese yen and risk-off is buying the yen. if there is good US data it should mean that the US currency should strengthen but because of the risk-on/off dynamic it is not always the case. Because the yen is alot like the US dollar in the case it is sometimes good to trade this pair as you go negative the US dollar on bad data and you go positive the japanese yen on risk aversion. The market right now is more slanted towards buying US dollars on bad news and risk aversion or risk-off than buying japanese yen, this is not always the case as many bad GDP releases in the past this pair has sold off. Here is the chart today which shows this didn't work today...