Market Brief: Asian Stocks Struggle After Mixed Chinese Economic Data
Asian stocks turn higher after a weak opening, mirroring Wall Street rebound. Investors focus on the reopening procedure in many countries around the globe, that helps sentiment. But the new cases in China, Germany and South Korea increase the fears for a second wave of infections. The China Industrial Production came in at 3.9%, topping the forecasts of 1.5% in April, while the Retail Sales came in at -7.5%, below the forecasts of -7%. Mixed data cast doubt over the speed of the Chinese recovery, which was the first country to lift the lockdown.
Minneapolis Fed Kashkari said that prospect of a quick, V-shaped recovery is “off the table, adding that USA should expect more than a year of economic hardship ahead.
More than 4.4 million cases of Covid-19 have been recorded worldwide, including at least 302,000 deaths. Robert Koch Institute in Germany reported that the number of confirmed coronavirus cases rose to 173,152, while the deaths surpassed 7,824.day.
Nikkei 225 ended 0.73% higher at 23,854. The Japanese government will lift the State of Emergency in 39 prefectures, but not in Tokyo. The Japan Producer Price Index (PPI) came in at -1.5% below the expectations of -0.9% in April, the yearly reading came in at -2.3%, below the forecasts of -1.6%.
The Hang Seng Index is 0.12% higher at 23,851. The Shanghai Composite index is 0.14% higher at 2,874. The FTSE Straits Times index in Singapore is 0.11% higher at 2,525.
NZDUSD continues lower for the fifth consecutive session amid USD strength across the board. Fed Chairman Jerome Powell on Wednesday rejected the negative interest rates scenario helping the US dollar to recover from pressure amid the reopening of the economies. Mixed economic data from China can’t support the New Zealand dollar.
On the technical side, the NZDUSD pair breached the 50-day moving average two sessions ago and now bears are in full control. On the downside, minor support stands at 0.5983 the daily low. If the selling pressure continues, the next support for NZDUSD will be met at 0.5954 the low from yesterday. The next support area will be met at 0.5908 the low from April 23.
On the other side, immediate resistance for NZDUSD pair stands at 0.6016 the daily high. A break above would meet the next resistance at 0.6091 the high from May 13. The next hurdle for bulls stands at 0.6159 the May 11 high.