Summary:
- Mixed session in Asia: Japan on the rise, Chinese equities decline
- AUD plunges after another retail sales miss
- US markets firm after a strong report from Apple
Asian session was mixed as it brought more gains to Japan and also saw Australian stock exchange rising (despite the domestic data) but China was softer as the PMI came on the weak side. Although the Chinese Hang Seng managed to stay around break even, stocks in Shanghai plunged nearly 1%. On the FX front we have a clear winner in NZD which seems to be simply recovering following two days of major declines and a loser in AUD suffering from the domestic data.
The data on retail sales in Australia did disappoint already last month when it saw an unexpected dip of 0.6% m/m. Traders hoped it was a one-off and would be compensated in data for September so the consensus was at +0.4% m/m. However, it was not the case – sales was flat in the last month of the third quarter and barely increased in a quarter as a whole, following a strong Q2. This will put a giant brake on any ideas to increase interest rates in Australia as the RBA will conclude that a lack of wage growth is a dominant factor in spending decisions for households. It seems like the Aussie was unable to capitalize on the period of elevated commodity prices and now could be suffering from both: weak domestic economy and a pullback in prices of goods like iron ore and copper.
AUDUSD is reversing down from a key zone with no support in sight. Source: xStation5
Looking at the AUDUSD, we can see that AUD weakness arrived at a perfect time for bears as it created a reversal from a level that used to be a resistance in the past, then worked as a support but now is becoming a resistance again. Do notice that there is no tangible support in sight.
Apple’s chart looks extremely bullish and strong results caused market euphoria yesterday. Source: xStation5
US markets managed to hang on to record highs following quarterly results from Apple.
The company presented a report that saw earnings topping expectations by a full $ bilion with strong iPhone sales and what’s important – also a very strong sales forecasts for a holiday period, soothing fears that a steep iPhoneX price ($1000 in the US) could hurt a demand. Clearly Apple (AAPL.US on xStation5 platform) is one of the powerhouses of this bull market in the US. We can see that price managed to break out of an already steep bullish channel even ahead of the report release which technically is a bullish sign.