The weekend saw Chinese trade data released which showed a widening in the trade surplus to $27.67 bln from $26.66 bln with a rebound in imports (+2.4 percent y/y from -2.6 percent last) matched by a better performance by exports. Exports rose 9.9 percent y/y versus 5.5 percent expected and 2.7 percent last. The only currency to have a kneejerk react at the open this morning was the AUD which opened 30 points higher versus the US dollar from its NY close. The reaction was short-lived however as details showed imports from Australia are still lagging from a year ago. The rest of the currencies were very close to NY Friday closing levels.
In other weekend data, China’s M2 money supply aggregate increased 14.8 percent y/y as a result of the PBOC liquidity injections during the period but new Yuan loans, released late Friday, were a mild disappointment versus consensus, coming in at Yuan 623.3 bln versus Yuan 703.9 bln last month.
China’s inflation numbers for September were released today and were a non-market moving event. CPI was bang in line with forecast at 1.9 percent (2.0 percent in August) while PPI continued its deflationary spiral with a fall of 3.6 percent y/y versus 3.5 percent expected.
In other data, UK house prices bounced back strongly in October, according to Rightmove, with a 3.5 percent increase from a month ago and 1.5 percent from a year earlier. Most of the gains were in central London districts with Kensington and Chelsea recording 9.1 percent m/m gains. GBP was unaffected by the data.
Risk appetite meandered into the weekend on Friday with firm US data underpinning sentiment but failing to provide an aggressive move higher. USD/JPY failed to make it past the 78.60 mark where stop triggers were reported and eased back but the AUD came under mild pressure after RBA Governor Stevens noted that Ozzie growth was slowing but the central bank had plenty of room to move on rates (lower). A rumour of a weekend PBOC RRR cut also failed to ignite risk.
On US data, Michigan confidence rose strongly to a 5-year high of 83.1 from 78.3 (78.0 expected) while headline PPI came in slightly stronger than expected (+1.1 percent m/m and +2.1 percent y/y) but core numbers were better behaved with a flat/2.3 percent print respectively. It was another mixed session for Wall Street which finished its worst week since June.
Data Highlights
- US September PPI out at +1.18% m/m, +2.1% y/y vs. 0.8%/1.8% expected and 1.7%/2.0% prior resp.
- US October Michigan Confidence out at 83.1 vs. 78.0 expected and 78.3 prior
- US September Monthly Budget out at +$75.0 bln, as expected vs. -$62.7 bln prior
- China September Trade Balance out at +$27.67 bln vs. $20.54 bln expected and $26.66 bln prior
- China September Exports out at +9.9% y/y vs. 5.5% expected and 2.7% prior
- China September Imports out at +2.4% y/y, as expected vs. -2.6% prior
- China September M2 Money Supply out at +14.8% y/y vs. 13.7% expected and 13.5% prior
- NZ September Performance of Services Index out at 49.6 vs. 50.0 prior
- UK October Rightmove House Prices out at +3.5% m/m, +1.5% y/y vs. -0.6%/+0.7% prior resp.
- AU Aug. Home Loans out at +1.8% m/m vs. 1.5% expected and revised -0.7% prior
- AU September New Vehicle Sales out at +4.7% m/m, +14.4% y/y vs. revised 4.3%/6.6% prior resp.
- China September CPI out at +1.9% y/y, as expected vs. 2.0% prior
- China September PPI out at -3.6% y/y vs. -3.5% expected and -3.5% prior
(All Times GMT)
- JP Industrial Production (0430)
- JP Capacity Utilization (0430)
- SI Retail Sales (0500)
- Swiss PPI (0715)
- Norway Trade Balance (0800)
- US Fed’s Dudley to speak (1200)
- US Advance Retail Sales (1230)
- CA Existing Home Sales (1300)
- US Business Inventories (1400)
- CA Business Outlook Future Sales (1430)
- CA BOC Senior Officer Loan Survey (1430)
- Us Fed’s Lacker to speak (1645)
- US Fed’s Bullard to speak (1710)