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    NYLON HANDOVER: China and Eurozone sentiment dominate

    China data is well and truly back on trader’s radar after taking a reprieve last week. Meanwhile in Eurozone the Volkswagen scandal persists. 

     



     

    OVERNIGHT:
    - Traders continued to sell AUD and NZD crosses following weak Chinese import data yesterday. With this being a leading indicator of growth for the exporting countries (or lack of) then this theme may dominate the crosses for the foreseeable future, with AUDUSD and NZDUSD to retrace further upon any signs of Greenback strength.
    - Global stocks also reacted negatively whist concerns for the upcoming earnings reports also linger. 
    - Institutional confidence for Eurozone and Germany weakened further than expected (thanks to the VW scandal) with Germany on the brink of becoming majority pessimists for the first time since October 2014. 
    - UK inflation dipped to -0.1% again with falling motor fuel prices and lower-than expected clothe price rises to blame. However PPI fell a further 13.3% to show manufacturing inflation has been contracting since July 2014. 
    - Gold prices tradede to a 6 week high on the soft China data and appears on the brink of breaking 1170 resistance whilst WTI and BRent extended losses.


    TODAY IN ASIA:
    - Australian Consumer Confidence, down -5.6% previously, may follow yesterday's bounce higher from Business confidence, which benefitted from change of PM last month. 
    - Chinese inflation data could bring further pressure on AUD and NZD crosses if below target but will also raise questions of how PBoC will deal with it (rates cut, reserve ratio adjustment or both). 


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