China industrial profits drop for 1st time in 3 years, Aussie slips to 0.7055

China’s industrial profits for December fell for the first time in three years, arriving at -1.8% y/y versus 3.6% previous.

Reuters highlights the further details on the Chinese macro release:

“Decline in profits largely reflected slowing growth in sales and producer prices as well as rising costs.

Economists expect earnings to continue to worsen next year, weighed down by smaller gains in industrial prices in the face of cooling demand, with some even warning of the risk of deflation.”

Meanwhile, the AUD/USD pair reversed course and fell to 0.7055 lows from multi-day tops of 0.7077, as downbeat Chinese data weighed on the Aussie amid thin market trading.

However, the spot managed to find some support from the risk-on rally in the Asian equities, led by the upsurge in the Wall Street overnight following the US Treasury Secretary Mnuchin’s conciliatory on the Fed while markets overlook the partial US government shutdown.

AUD/USD Technical Levels