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Trending Economic: Afternoon Brief [19 October 15]

China’s GDP growth rate came in at 6.9%, its lowest since 2009, but still above the market expectations. This has given AUD some lift, ahead of the RBA’s meeting minutes to be released on Tuesday. Also CHF is now the weakest among the G10 currencies, possibly on improving risk sentiments. Overall the economic data for today is thin, and both the Fed speakers Brainard & Lacker, due today at 1400 & 1600 GMT, have already made their views clear and are speaking on non-monetary policy topics. 

EUR has come under pressure since Nowotny speech on last Thursday, and we see the current trend to continue with Nowotny due to participate in a Panel discussion at 1500 GMT, and the ECB’s monetary policy meeting due on Thursday. The market participants are expecting a more dovish message from ECB’s president Draghi to make grounds for the QE expansion in the December meeting. 

Elsewhere, Canada’s election polls are putting the Liberals about seven points ahead of the incumbent Stephen Harper (seeking a fourth term). Overall impact on CAD has been minimal ahead of the Bank of Canada’s monetary policy meeting on Wednesday; the financial markets are expecting no change in the BoC policy or interest rates and we see CAD weakness if the BoC surprises to the dovish side. Another important factor to look out will be crude oil prices as the correlation between oil and CAD continue to remain high, currently 73% over the last month.