Intraday Market Thoughts

China GDP to Hit Thin Holiday Market

by Adam Button
Jul 15, 2013 0:43

The Australian dollar is the early leader, shortly after the weekly market open but that could change with second quarter Chinese GDP numbers upcoming. The Swiss franc was the leader last week while the Australian dollar lagged. The CFTC Commitments of Traders report showed a jump in euro shorts.We issued 2 trades in EURUSD today, following yesterday's USDJPY and 2 GBPUSD trades, which were charted alongside weekly and monthly technicals in the stochastics of the UK-US 10-year spreads. All these trades and charts are in the latest Premium Insights.

The market continues to reel from Bernanke's comments last week and the wild round of dollar weakness. Markets are thin to start the week because Japan is closed for holiday.

The immediate focus turns to China and GDP numbers, which will be released shortly. After the weak import/exports numbers last week the bias is for a reading weaker than the +1.8% q/q figure expected. The y/y reading is expected at +7.5%. Along with GDP, industrial production and retail sales numbers will be released. Production is expected to rise 9.1% y/y.

Commitments of Traders

Speculative net futures trader positions as of the close on Tuesday. Net short denoted by - long by +.

EUR -41K vs -16K prior JPY -80K vs -71K prior GBP -34K vs -31K prior AUD -63K vs -70K prior CAD -24K vs -16K prior NZD -1K vs -1K prior CHF -1K vs +flat prior US Dollar Index longs at 29K vs 16K prior

The market was piling into euro shorts just ahead of the comments from Bernanke. The squeeze likely sent many traders scrambling for the exits.

Act Exp Prev GMT
Industrial Production (JUN) (y/y)
9.1% 9.2% Jul 15 2:00
Retail Sales (JUN) (m/m)
0.8% 0.6% Jul 15 12:30
Retail Sales (ex. Autos) (JUN) (m/m)
0.4% 0.3% Jul 15 12:30
Retail Sales (JUN) (y/y)
12.9% 12.9% Jul 15 2:00

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