Asia Rises as China’s GDP Meets Expectations

Equity and financial markets in Asia advanced this morning, following gross domestic product data from China that met expectations the third quarter of 2016.

The National Bureau of Statistics showed that the third quarter GDP grew by 6.7 percent, annually, and 1.8 percent quarterly. This was in line with expectations. Other data released today showed that fixed income investment increased by 8.2 percent, annually. Retail sales were up 10.7 percent, annually, in September and industrial production rose 6.1 percent in September, missing expectations for 6.4 percent.

The missed industrial production number will have a bigger impact on the Australian Dollar, which fell this morning from 0.7668 toward 0.7690 before the data came out. The Australian Dollar is consider a proxy for the health of China’s economy as China is the largest trading partner for raw materials out of The Down Under. The Aussie is currently trading at 0.7664.

After the data, China’s markets with the Shanghai Composite up 0.2 percent and the Shenzhen Composite rising 0.14 percent, this morning.

Looking at the broader currency market, in morning trading hours, the US Dollar index, which is the Dollar trading against a basket of currencies, fell a bit. As of 10:35 HK time, the US Dollar was trading at 97.82, compared to the last close at 97.90.

There was data from the United States which showed that the consumer price index (CPI) rose 0.3 percent in September, after rising 0.2 percent in August. The print was in line with expectations. Hotter inflation, does not equate to a stronger Dollar. Rate hike expectations were not changed by this CPI print.

This morning the British Pound rose to a high of $1.2315 up from Tuesday’s 1.216. This follows reports that the UK Parliament may need to ratify any deal to exit the European Union. This eased concerns of a hard Brexit. There was also higher-than-expected inflation out of the UK which supported the Pound. UK inflation fata rose one percent, annually, which should dampen consumer demand even though the Bank of England said it will remain dovish. As of 1030 HK time the GBP/USD Forex market was trading at 1.2290.

Looking at the Mexican peso, which was trading at 18.59 against the Dollar, during early Asian trade. This is down from near $19.00 in yesterday’s session. This Forex market eased as reports are showing Trump is losing ground in his bid to become the next US President.