China Retail Sales and Industrial Production Leave the AUD/USD in the Red

It was a busy morning on the economic calendar for the Aussie Dollar and riskier Assets. The Chinese economy was back in the spotlight, with industrial production, fixed asset investment, and retail sales figures in focus.

The numbers were bearish for riskier assets, with industrial production up 5.0% year-over-year in October versus 6.3% in September. Economists forecast a 5.2% increase. Fixed asset investments also came in weaker, rising by 5.8% versus 5.9% in September.

Lockdown measures impacted spending, with retail sales down 0.5% year-over-year versus a 2.5% increase in September. Economists forecast a 1.0% increase.

The Aussie Dollar remained in the red as a result of the bearish numbers. At the time of writing, the Aussie Dollar was down 0.08% to $0.66939, up marginally from an early low of $0.66854.

The latest stats from China followed the RBA meeting minutes, which were also Aussie Dollar negative. According to the latest minutes, the RBA delivered a smaller-than-expected rate hike this month ‘partly due to concerns of falling housing prices hurting consumer spending.’

COVID-19 Restriction Measures Remain Headwind for Commodities

While the stats were weaker, market reaction was more muted than usual. Plans to ease COVID restrictions cushioned the downside, though confusion remains as the number of COVID cases surged.

According to Reuters, a weekend surge in new COVID-19 cases has created uncertainty over whether the government will stick to the new restriction plans. Reportedly, Beijing was among the big cities to report record infections.

On Friday, China’s National Health Commission eased restriction measures, announcing shorter quarantine times for arriving travelers and close contact cases. However, the latest rise in new cases could force the government to reintroduce tighter restriction measures that would be Aussie Dollar negative and weigh on commodities.

This morning, WTI was down 0.55% to $85.40, with Brent down 0.25% to $92.91.

However, while crude was on the back foot, the Hang Seng Index (HSI) and CSI 300 stood their ground. At the time of writing, the HSI was up 1.70%, with the CSI 300 up 0.15%. The NASDAQ mini also brushed aside the weaker numbers, rising by 63.75 points.