China surprises with the promising macro data

Yesterday was mostly a correction day for major instruments on the market. With the absence of Americans, trading was not very volatile and momentum was pretty much low. The big question today is if the correction will be continued or if Tuesday will bring us a comeback to the main trends seen since the beginning of the year.

Let’s start with the calendar, which already brought us one interesting piece of information. GDP in China came as 2.9% instead of the 1.6% expected. The difference is quite huge, so you can imagine the scale of the surprise. This number is a promising number for the stock bulls, as the worries about the shape of the global economy after this number can be kind of smaller. GDP was the headline print but we also got Industrial Production, Retail Sales, and Unemployment Rate data. All those numbers came way better than expectations.

The reaction? Hang Seng or Shanghai Composite index is totally not amazed and is currently trading negatively. Japanese Nikkei on the other hand rises more than 1.2%. Usually, when something good happens in China, we do have a positive reaction on the pairs from the Antipodes: AUD and NZD. It is not different this time. New Zealand Dollar starts Tuesday as the strongest currency among majors, with the AUD not being far behind.

There was not much happening on the commodities. Maybe apart from the Gas, which reached the spotlight after Russia attacked Ukraine and weaponized the commodity market. Dutch TTF Gas and UK Natural Gas collapsed yesterday by more than 15%. In both cases, that means new, long-term lows.

Today’s calendar does not end with data from China. We are still going to have some juice in it. Later, before the kickoff in America, we will have the inflation data from Canada and a bit later Empire State Manufacturing Index. Let’s see if those numbers will also bring a surprise like the one from China.