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Barry Norman
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AUD/USD Fundamental Analysis October 14, 2014 Forecast
Analysis and Recommendation:

The AUD/USD is trading at 0.8732 up by 45 points this morning on strong Chinese trade data. Much stronger-than-expected Chinese trade data have significantly boosted the Australian dollar and miners.

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The closely-watched official figures showed that exports in September surged 15.3 per cent from a year ago, ahead of economist forecasts in a Bloomberg survey that centered on 12 per cent annual growth. More importantly for Australia, China’s imports, which were expected to have fallen around 2 per cent, actually rose 7 per cent.

Specifically, China’s demand for iron ore in September was up 13.1 per cent from August, sparking a dramatic recovery in the share prices of Australian miners.

Officials are targeting economic growth of “about 7.5 per cent” this year, the same as last year’s objective. The goal is normally exceeded, but senior officials have repeatedly sought to play down its significance this year. Last week the World Bank cut its forecast for Chinese growth to 7.4 per cent for 2014 and 7.2 per cent for 2015, while the International Monetary Fund left its predictions unchanged at 7.4 per cent and 7.1 per cent but warned of “near-term growth risks”, especially in real estate.

Investors are turning away from higher risk currencies such as the kiwi and Aussie on concern about the outlook for the global economy following weakness in Europe, Japan and China. Global growth concerns have strengthened currencies such as the yen while weighing on commodities and stock markets.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Today’s economic releases actual vs. forecast:

 

Cur.

 

Event

Actual

Forecast

Previous

 

 

Holiday

Japan – Health-Sports Day

 

 

Holiday

Canada – Thanksgiving Day

 

  CNY

 

Exports (YoY) (Sep)

15.3%

11.8%

9.4%

 

 

  CNY

 

Imports (YoY) (Sep)

7.0%

-2.7%

-2.4%

 

 

  CNY

 

Trade Balance (Sep)

31.00B

41.00B

49.83B

 

 

Upcoming Economic Events that you should be monitoring:

 

Cur.

Event

Actual

Forecast

Previous

 

  AUD

RBA Asst Gov. Debelle

 

 

 

 

 

  CNY

New Loans

 

750B

703B

 

 

  EUR

French CPI

 

-0.3%

0.4%

 

 

  EUR

French HICP

 

-0.3%

0.5%

 

 

  EUR

Spanish CPI

 

0.2%

0.2%

 

 

  GBP

CPI (MoM) (Sep)

 

0.2%

0.4%

 

 

  GBP

CPI (YoY) (Sep)

 

1.4%

1.5%

 

 

  GBP

PPI Input (MoM) (Sep)

 

-0.4%

-0.6%

 

 

  EUR

Italian CPI (MoM) (Sep)

 

-0.3%

-0.3%

 

 

  EUR

Industrial Production

 

-1.6%

1.0%

 

Government Bond Auction

Date Time Country Auction

Oct 14 08:30 Spain 6 & 12M T-bill auction

Oct 14 09:30 Belgium 3 & 12M T-bill auction (Jan & Oct 2015)

Oct 15 09:03 Sweden Bond auction

Oct 15 09:30 Germany Eur 4.0bn Sep 2016 Schatz auction

Oct 16 08:30 Spain Bono/Obligacion auction

Oct 16 09:30 UK Auctions 0.125% 2024 I/L Gilt

Oct 16 15:00 US Announces details of 30Y TIPS auction on Oct 23

 

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