This week’s data will give investors a glimpse into the health of China’s economy. Recently, the Shanghai Composite Index lost 30% from its seven year highs. The fall of the index has again raised questions about the stability of the Chinese economy. Stories are already starting to surface regarding wealthier Chinese citizens starting to flee Chinese property and stocks to invest in safer foreign investment products and property. Needless to say, because of these concerns China is becoming a danger to the strength of the AUD.
The earlier part of this week is heavy in Chinese data; today things kick off with the Chinese Trade Balance. The figure is expected to be down against June’s figure however, Junes figure was better by 25 billion from the May’s figure. The Trade Balance figure is a tentative release so traders need to be careful as we could see some surprise volatility in the market today.
Wednesday 12pm EST is when the next lot of Chinese figures are due for release these being China’s Gross Domestic Product GDP and Industrial Production. China’s GDP figures, if we think back to the early 2000’s, used to average around 13% growth per annum, a full 10% above the OECD average. Ten years later, this week’s release is expected to be a mere 6.9%, a considerable reduction compared to the “boom times”. The Industrial Production figure has shown a similar trend, the 10% per annum growth figure are a thing of the past. The latest release is expected to be ten basis points lower than last month’s figure, at 6%.
Tuesday this week will have NAB’s business confidence index followed by Wednesday’s release of the Westpac Consumer Confidence numbers. Both the Business Confidence and Consumer Confidence figures have struggled over the recent 12 months. However, since February this year Consumer confidence has slumped, while Business confidence has improved. There are no expectations on the releases, however, the recent trend should continue and the confidence in Australia’s economy remains steady, at current lower levels.