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:

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.