After a relatively calm overnight session due to the US holiday, Asia opened today’s session with a slew of Japanese data.
Japan’s unemployment rate nudged up to 4.6 percent from 4.5 percent previously (and expected) in April and was the first increase in 3 months but there was some welcome news as the job-to-applicant ratio pushed up to 0.79 from 0.76, its highest level since October 2008 meaning there was a larger 70 jobs available per 100 jobseekers. With economic conditions either stagnating or deteriorating, employers are still reluctant to add manpower, while it has also been noted that a mismatch of job availability and geographical areas is evident.
A slowdown in consumer activity was also noted in the household spending and retail sales data. Retail sales were 0.3 percent lower than a month ago, slightly worse than the +0.1 percent expectations but at least an improvement on the 1.2 percent decline seen in March. Large retailers’ sales also slipped into negative territory for the first time in 4 months. On the household spending front, spending fell further in April, declining 0.8 percent m/m compared to a 0.1 percent drop in March. Spending volumes have been undermined by lackluster income growth as well as consumers’ worries over the economy and rising fuel costs.
Risk and equity markets were sliding slowly as the morning progressed but found some support as Asia latched on to the idea that further stimulus would soon be coming from China. Rumours were circulating late yesterday of a Yuan 2 tln package and this helped the Shanghai Composite into positive territory.
The overnight session was a mild affair due to the US Memorial day holiday. Early strength in EURUSD, started in Asia on the back of weekend Greek opinion polls, soon ran out of steam and the pair finished the European session lower.
Data Highlights
JP Apr. Jobless Rate out at 4.6% vs. 4.5% expected and 4.5% prior
JP Apr. Job-to-Applicant Ratio out at 0.79 vs. 0.77 expected and 0.76 prior
JP Apr. Retail Trade out at -0.3% m/m, +5.8% y/y vs. 0.1%/6.0% expected and -1.2%/10.3% prior resp.
JP Apr. Lge. Retailers’ Sales out at -0.5% y/y vs. -0.3% expected and revised 5.1% prior
AU Apr. HIA New Home Sales out at +6.9% m/m vs. -9.4% prior
JP May Small Business Confidence out at 47.2 vs. 49.6 prior
Upcoming Economic Calendar Highlights
(All Times GMT)
GE Import Price Index (0600)
Swiss Consumption Indicator (0600)
Sweden Consumer Confidence (0715)
Sweden Household Lending (0730)
Norway Unemployment Rate (0800)
UK CBI Reported Sales (1000)
GE CPI (1200)
US S&P CaseShiller House Prices (1300)
US Consumer Confidence (1400)
US Dallas Fed Manufacturing Activity (1430)
Andrew Robinson,
SAXO BANK