Stronger than expected Chinese growth data has given a slight boost to risk appetite. Growth in Chinese industrial output (+13.3%) and fixed asset investment (+25.8%) remains robust and above market expectations, while retail sales (+16.9%) was modestly below expectations in O/N releases.
Despite the slowing of Chinese new loan data over the weekend pointing to future softer data, the market seems to be happy that their economy is not slowing sharply. Proof that Chinese demand and internal driven growth is still somewhat strong.
Market focus will now turn to US retail sales this morning where its expected to have stalled in May, the first time in eleven-months. Investors continue to feed off periphery headlines for vindication of their short EUR positions.
The US$ is weaker in the O/N trading session. Currently, it is lower against 13 of the 16 most actively traded currencies in a ‘whippy’ session.
