Asia got busy after the long Easter weekend with a number of key data releases – and there were some surprises!
China’s trade data for March astounded with a hefty surplus of $5.35 bln reported versus expectations of another deficit following the $31.48 bln printed in February. The huge turnaround came as a result of higher than expected exports and lower than expected imports – the double whammy. We had mixed results to the data. Risk appeared to be given a slight boost but the AUD failed to secure any gains with the lower import numbers affecting the AUD’s prospects.
Next up we had the Bank of Japan rate/stimulus decision, which was announced early and took some market participants by surprise. The vote was unanimous for no change in both rates and the asset purchase programme (seen as a surprise, as one member called for further easing at the last meeting) and USDJPY and JPY crosses gave back all the gains made overnight on the back of a Nikkei News article suggesting further stimulus was coming (though in truth they did say that the April 27 meeting was more likely for any move).
The second-tier data out of Australia was a slight upward surprise with the construction PMI improving to 36.2 from 35.6, NAB’s business conditions reading improved to +4 from +3 and as a result business confidence edged up to +3 from +1. The only snag was a slightly worse increase in ANZ job advertisements to +1.0 percent m/m from +3.3 percent.
In the aftermath of the data releases, risk currencies retreated from earlier highs during the lunch period while Asian bourses either gave back some early gains or drifted deeper into the red. A definite sense of further risk-off trading permeated through markets.
Late yesterday China also reported its CPI and PPI data from March. PPI suggested pipeline inflation is not an issue with a 0.3 percent y/y fall (as expected) following a flat reading in February. CPI was a bit more of a concern with a jump to 3.6 percent y/y from 3.2 percent in February and above the 3.4 percent consensus. There was further weakness for the US dollar overnight as the impact of Friday’s US jobs data continues to filter through as more participants return from the Easter break.
Data Highlights
China Mar. PPI out at -0.3% y/y, as expected vs. flat prior
China Mar. CPI out at +3.6% y/y vs. 3.4% expected and 3.2% prior
UK Mar. Lloyds Employment Confidence out at -58 vs. -69 prior
UK Mar. RICS House Price Balance out at -10% vs. -13% expected and -13% prior
AU Mar. AiG Performance of Construction Index out at 36.2 vs. 35.6 prior
AU Mar. NAB Business Conditions out at +4 vs. +3 prior
AU Mar. NAB Business Confidence out at +3 vs. +1 prior
AU Mar. ANZ Job Advertisements out at +1.0% m/m vs. +3.3% prior
China Mar. Trade Balance out at +$5.35 bln vs. -$3.15 bln expected and -$31.4 bln prior
China Mar. Exports out at +8.9% y/y vs. 7.0% expected and 18.4% prior
China Mar. Imports out at +5.3% y/y vs. 9.0% expected and 39.6% prior
JP Bank of Japan leaves rates unchanged, no additional stimulus measures
Upcoming Economic Calendar Highlights
(All Times GMT)
Swiss Unemployment Rate (0545)
GE Trade Data (0600)
GE Current Account Balance (0600)
JP Machine Tool Orders (0600)
Sweden Industrial Production/Orders (0730)
Norway CPI/PPI (0800)
EU Sentix Investor Confidence (0830)
Sweden Budget Balance (0830)
UK DCLG House Prices (0830)
US NFIB Small Business Optimism (1130)
US IBD/TIPP Economic Optimism (1400)
US JOLTs Job Openings (1400)
US Wholesale Inventories (1400)
US Fed’s Fisher to speak (1630)
US Fed’s Lockhart to speak (1645)
US Fed’s Kocherlakota to speak (1830)
Andrew Robinson,
SAXO BANK