China is set to release a slew of economic data for December this evening so it would not be a surprise if traders begin to move to the sidelines over the next several hours ahead of the event risk.
Industrial production (expected up 19.6% y/y) , GDP (expected up 8.5% in Q4) CPI (expected up 1.4%) and retail sales (expected up 16.3%) are the highlights.
Watch the inflation figures closely. Chinese authorities are obviously becoming concerned by rising prices so hot data may not necessarily lead to the typical “strong China=buy risk” trade. AUD could be particularly volatile as a result. Strong data may prompt the PBOC to drain the punch bowl that much faster…