China's GDP for the 3rd quarter came in weaker than expected, posting an annualized reading of 9.1%, compared to 9.3% forecast, and 9.5% in the 2nd quarter. That shows that the tightening campaign by the central bank meant to tame inflation has caused the economy to cool. We have also seen China's key trading partners such as the Euro-zone and the US slowdown as well. That's the slowest growth rate in 2 years.

Still, because the possibility of recession in Europe and the US have diminished there's a chance that China's economy bounces back in the 4th quarter. There is also still the chance the the central bank may raise the deposit interest rate yet again as shadow banks and underground loans have been accumulating.

However, despite the weaker GDP reading, the monthly readings on both retail sales and industrial production came in better than expected. Retail sales rose 17.7% on the year in September, beating expectations of a 17.1% climb, while industrial production was up 13.8%, also beating expectations of a 13.5% reading.

Therefore the next important signal from the People's Bank of China (PBOC) will be important and should come around November. The need to tighten policy is likely not needed considering slower-than-expected growth, but would the PBOC signal loosening of policy? Again, we have to wait and see.

Here's our preview of the release: Preview: Chinese GDP to Determine Next Swing for Risk Sentiment

The mixed data did not help to soothe Asian markets, which followed up risk-off trading in Europe and in NY with sharp falls at the onset of the Asian trading session.

The Nikkei 225 was off 1.5%, Hang Seng in China was down 3%, Australia's S&P ASX index was off 1.72%.

width=630

Above is the Australia ASX index, and as we can see, we are seeing a correction here similar to what we saw in the S&P500. Here we have a break of and upward sloping trendline of support, which indicates that this correction may have more scope to fall.

- Nick Nasad is the Chief Market Analyst at FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.