Archived IMT (2010.10.20)

CHINA DATA VALIDATION of Tuesday's rate hike may emerge in tonight's China Q3 GDP, CPI and retail sales. 3Q GDP exp +9.5%, CPI exp 3.6% vs prev 3.5%, retail sales exp 18.5%, industrial production exp 14.0%. These strong figs may have been the reason for this week's rate hike, which helps keep US pressure off China for now. A strong data showing may well further help Asian mkts and risk appetite.

USD DROPPED back as risk appetite took over as FX traders realising that yesterday's USD rally was a overdone considering that the Fed remains the only central bank on its way with the BIGGEST QE (way more than Japan's 5 trln yen) while the ECB by contrast is looking the other way. As I said yesterday, the euro is on its way to consolidate around 13700 and 14000 until the Fed decision/midterm elections/G20.