China Data No Help for Damaged AUD

Chinese weekend data showed a mildly slower pace of industrial production. Last week the yen was the best performer while the Australian dollar continued to struggle. The week starts with final revisions to Japanese Q1 GDP and April trade balance. If EURUSD rallies on Monday then it would complete the 6th straight daily gain, which is the longest winning streak in over 2 years.

The Australian dollar slumped into the weekend, posting the first weekly close below 0.9500 since 2010. It was also the fifth consecutive week of losses for the Aussie.

Australian dollar bulls are struggling to find a reason for optimism. China has fuelled the investment boom but growth continues to level off. May Chinese industrial production was up 9.2% y/y compared to 9.4% expected. It's a slight slowdown from the 9.3% y/y pace through April.

The Chinese consumer remain a bright spot with May retail sales up 12.9% y/y, which was in line with expectations and slightly faster than 12.8% y/y in April.

One positive sign in the global economy might be lowered tensions in the Korean peninsula as the countries agreed to minister level talks beginning Wednesday. If the lower-level talks could pave the way for stable relations it could tone down nuclear rhetoric.

The Japanese calendar features a pair of noteworthy events to begin the week, both at 2350 GMT. No revisions to first quarter GDP are expected  after an earlier report of 3.5% annualized growth. The potential for surprise comes from April current account and trade balance numbers. Trade numbers are expected to show a 729 billion yen deficit. A miss likely wouldn't change the BOJ outlook but it might show the effect of radical QE programs introduced in early April.