The main focus this morning in the Asian session will be on the latest data out of China with a couple of big numbers.

We’ll be watching GDP closely which is expected to show a rebound from 3.2% to 5.2%, in a sign that the COVID induced slowdown is starting to wind down. Of course, China was were this whole saga began and it should be said that it is likely six months ahead of the other major trading nations of the world. So this number is a good one from that perspective and is hopefully a catalyst for markets this week.

At the same time, we also get the latest industrial production data, which is expected to show a jump to 5.8% from 5.6% – not as large as GDP, but it didn’t fall as far either. We’ll also see data on retail sales and unemployment claims as well, so these will all be in some way linked to that key GDP print.

AUD and NZD

The two majors that will likely move on the release most of all are the AUD/USD and NZD/USD.

The Aussie has been under pressure thanks to the RBA suggesting it will be looking to cut rates at the next meeting. This news might well be priced in by now, but it could well put a cap on the price action. Even if other risk assets move higher this week, it will be interesting to see if the AUD/USD can respond. Markets are pricing in a rate cut now and a long period of ultra-low interest rates.

The focus in New Zealand over the weekend was the election and as expected, Jacinta Adern was returned to power in a landslide victory. This was expected by markets and so far the Kiwi is green on the session. Whether anything changes is another matter, but she now has outright control and a mandate to govern so this will be interesting times for NZ.