UK Second Estimate GDP | Current Market Sentiment

There is no trade call for the session. Ahead we have two important releases – UK Second Estimate GDP at 9:30am GMT and Eurozone Final CPI at 10:00am GMT. Both of which have the capacity to provide direction in sterling and euro.

Current Market Sentiment

The key economic release for the Asia-Pacific session was Q4 Private Capital Expenditure from Australia which beat estimates at 0.8% on the headline, above -3.0% expected. Building Capex and Plant and Machinery Capex also beat estimates. However the estimates for 2016 and 2017 Capex were disappointing with 2015/16 down 0.6% since prior estimate and 2016/17 was down 19.5% from first estimate. 2016/17 Capex showed estimates of $82b, below the expected smaller decline to $93b. These details of the release outweighed any positive sentiment from the headline beat and Aussie fell 45 pips from post-announcement highs.

The Nikkei initially moved up during the session, following on from the positive Wall Street close. This helped USDJPY rally over 150 pips from yesterday’s lows, however Asian equities began to decline in the latter stage of the session with the Shanghai Composite down over 6%. Accordingly, some yen strength has re-emerged in markets.

P.S. These releases were also covered in the weekly risk events video. You can watch it here.

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