The mild risk-off mood that permeated through markets yesterday extended into today’s Asian session. We had a number of data points, but none were first-tier and had little impact on the day’s activity.
There was some slightly better news for Japan with the BSI’s quarterly sentiment survey showing large manufacturers feeling most positive since end-2011, with the index rising to +2.5 from -5.7 in the last quarter. Across all industries, the index also showed a strong rebound, rising to 2.2 from -3.1. The future outlook also looks more promising, according to the survey, with Q4 expectations seen at +8.8. Capital expenditure plans for 2012/13 were also revised higher to +9.8 percent y/y from +8.4 percent last.
From Australia, business confidence surveys were more mixed. Current business conditions improved to +1 from -3, according to the latest NAB survey but business confidence slipped back to -2 after last month’s rise to +3 (revised).
Housing data from the UK saw RICS house price balance falling slower than expected, coming in at -19 percent rather than the -23 percent consensus and -23 percent seen in July. August’s decline was the smallest since May, with some stability finally starting to show up, though accompanied by significant regional variations.
Eventually we did have some data that moved markets a touch – China’s new Yuan loans data for August. New loans rose to Yuan 703.9 bln, larger than the Yuan 600 bln median estimate and a greater increase from July’s Yuan 540.1 bln. The total was a new record for August and suggests stimulus efforts may be gaining traction.
EURUSD popped a couple of spreads higher and was given an extra lift later when IMF’s Zhu Min commented that the IMF strongly supported the recent decision by the ECB to boost the stability of the Euro-zone (bond-buying). However, gains were limited when he went on to say that the EU crisis has a lot further to go and we must not under-estimate the impact Europe’s crisis was having on the global economy. Growth risks for the world remain to the downside, he added. George Soros agreed when separately he said that Europe’s recession will intensify and spread to Germany in six months. He opined that it would be by far the best if Germany and other creditor countries withdrew from the euro in a negotiated separation.
From here, it appears we are on for the Wednesday Wait with the German constitutional court decision and Dutch elections.
Data Highlights
US Jul. Consumer Credit out at -$3.276 bln vs. +$9.2 bln expected and revised +$9.823 bln prior
NZ Aug. Credit Card Spending out at +2.4% m/m vs. 1.0% expected and revised -1.4% prior
UK Aug. RICS House Price Balance out at -19% vs. -23% expected and revised -23% prior
JP Q3 BSI Lge. All Industry Index out at +2.2 q/q vs. -3.1 prior
JP Q3 BSI Lge. Manufacturing Index out at +2.5 q/q vs. -5.7 prior
AU Aug. NAB Business Conditions Index out at +1 vs. -3 prior
AU Aug. NAB Business Confidence out at -2 vs. revised +3 prior
China Aug. New Yuan Loans out at Yuan 703.9b vs. Yuan 600.0b expected and Yuan 540.1b prior
Upcoming Economic Calendar Highlights
(All Times GMT)
GE Wholesale Price Index (0600)
JP Machine Tool Orders (0600)
UK Visible Trade Balance (0830)
US NFIB Small Business Optimism (1130)
CA Housing Starts (1215)
CA Int’l Merchandise Trade (1230)
US Trade Balance (1230)
IS IBD/TIPP Economic Optimism (1400)
US JOLTS Job Openings (1400)
UK BOE’s Miles to speak (1715)
Andrew Robinson,
SAXO BANK