FX Markets Look Ahead To Chinese GDP, New Zealand & Canadian CPI

Talking Points:

– The week ahead is barren for key economic data out of the Euro-Zone, the United Kingdom, and the United States; although, French elections on April 23 are just around the corner.

– Chinese GDP on Monday, New Zealand CPI on Wednesday, and Canadian CPI on Friday are the only ‘high’ rated data releases on the DailyFX Economic Calendar in the week ahead.

– Client positioning has moved considerably over the past week – see recent changes on the IG Client Sentiment data page.

04/17 Monday | 02:00 GMT | CNY Gross Domestic Product (Q1’17)

The Chinese economy is forecast to have grown by +6.8% on an annualized basis in the first quarter, essentially the same rate of growth seen over the preceding four quarters in 2016 and for the year 2016 overall. Once again, for 2018, the Chinese government is targeting the economy to grow between +6.5% and +7.0%. As the Chinese government guides growth rates lower as the economy matures, it’s important to recognize that the growth readings are the lowest in nearly three decades – since 1990. Chinese growth is currently being fueled by increased government expenditures and an overall trade surplus (as the March figures showed), despite the trade deficit seen in February 2017 (thanks to a calendar quirk around Chinese New Year; February 2012 and February 2014 also produced the only other monthly trade deficits seen ove the past five years).

Pairs to Watch: AUD/JPY, AUD/USD, USD/CNH

04/19 Wednesday | 22:45 GMT | NZD Consumer Prices Index (Q1’17)

Like many other developed countries around the world, New Zealand is expected to show a bump higher in Q1’17 inflation figures, thanks in large part due to the base effect provided by lower oil prices during Q1’16. As a result, we’re looking for the Q1’17 New Zealand CPI figure to come in at +2.0% (y/y), which would only be the second time that CPI ended within the RBNZ’s band over the past two years. With that said, however, the jump in inflation in New Zealand wouldn’t necessarily constitute a material improvement, as the Reserve Bank of New Zealand typically sees energy-borne jumps in price pressures as “temporary.” The headline reading might jazz up the New Zealand Dollar temporarily, but a sustained move is not eyed as the RBNZ continues to talk down its currency and temper expectations of an interest rate hike in 2017.