We started the day a couple of hours ago as most European forex traders, but the market has been open for about 12 hours now. So, what´s been happening in the Tokyo trading session during the time that European and US traders were dreaming green of pips?
The first important economic data release came from Japan and it took everyone´s attention. The Japanese prelim GDP grew 0.5% in the third quarter against 0.2% expected. The 0.1% drop in the DGP price index took some of the shine off the main GDP numbers but, in general, it was a good report.
Japan is dragging itself out of contraction since this is the third quarter with positive growth in the last four ones. USD/JPY didn´t blink though, since the market sentiment right now is much stronger than the impact the economic data might have. Once the US election trading is over, the economic data that has been ignored during this time will start forming the new market sentiment.
In China, the industrial production grew at a steady pace of 6.2% while the fixed asset investment came out one point above consensus. The thing to worry, though, was the miss in retail sales. Does this mean that the Chinese consumer is having difficulties? On the bright side, the retail sales include all year round, so maybe the mini-crash we saw in the financial markets early this year might have played a role in this.
Another disappointing number came from the UK. Last week, the Halifax HPI (house price index) showed a 1.4% jump in the house prices for October. But last night, the Rightmove HPI showed a 1.1% decline for the current month. We thought that the effects of the Brexit vote were over, but today´s UK housing sector data has brought us back on the floor. This Brexit thing is going to take a long long time, so we better get used to volatile economic numbers from the UK.
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