After the excitement and volatility linked to the BOJ meeting yesterday, Asia settled back into customary range-trading, despite it being the last trading day of the month.
On the data front we saw the first of the Asian PMI data for October with Japan’s manufacturing PMI drifting back to 46.9 from 48.0 the previous month. This marks the lowest point since April 2011 and the fifth month below the 50 expansion/contraction threshold. The deterioration reflects the difficult times faced by Japan’s manufacturing sector from a slowing global economy and firm JPY. The new export orders sub-component was marginally higher at 46.7 but still affected by the anti-Japanese sentiment in China while the output component hit an 18-month low of 46.4. China’s data is due tomorrow.
From Australia, Australians appear to be building more homes yet borrowing less to do it. Building approvals soared way past expectations in September, jumping 7.8 percent from a month ago on a large spike in apartment and renovation project approvals. Recall the latest data from RPData-Rismark showed house prices across Australia rising 1.4 percent in September from a month earlier. Despite the surge in approvals, private sector credit data remained insipid, suggesting recent RBA cuts are not doing much to spur consumer into taking on mortgages. Loans for home purchases rose a mere 0.4 percent from August with the 4.0 percent annual increase showing outstanding housing credit rising at its slowest pace in at least 35 years. Total outstanding credit rose 0.3 percent from a month earlier to A$2.1 tln.
From Singapore, anecdotal tightness in the local labour market was reflected in the unemployment rate edging lower to 1.9 percent in Q3 from 2.0 percent in Q2. Singapore’s ministry of manpower has tightened controls on foreign labour and this is filtering through into the broader market. The unemployment rate matched the recent low in Q1 2011 with the all-time low of 1.7 percent seen in Q3 and Q4 2007. Labour tightness is igniting fears that inflation may perk up in coming months. CPI jumped to 4.7 percent in September from 3.9 percent in August.
We had another session of muted activity with New York financial markets mostly closed due to Hurricane Sandy. Spanish Q3 GDP was marginally better than expected (though still in negative at -0.3 percent q/q, -1.6 percent y/y) and the Italian debt auction went well and these factors lent a slightly better bid tone to the EUR. USDJPY was mostly static around the 79.50 mark following yesterday’s slight disappointment with BOJ stimulus measures. GBP was also a tad firmer following a very strong CBI reported sales survey (rising to +30 from +6). On the US data front, S&P CaseShiller house prices were firmer than expected at +2.03 percent y/y, the biggest monthly increase since July 2010. Wall Street remained closed but is due to re-open today.
Data Highlights
- US Aug. S&P CaseShiller House Prices out at +2.03% y/y vs. 1.90% expected and 1.20% prior
- NZ Sep. Building Permits out at +7.8% m/m vs. 3.0% expected and revised +2.8% prior
- JP Oct. Markit/JMMA Manufacturing PMI out at 46.9 vs. 48.0 prior
- UK Oct. GfK Consumer Confidence out at -30 vs. -28 expected and prior
- AU Sep. Building Approvals out at +7.8% m/m, +12.4% y/y vs. 1.0%/2.1% expected and revised 8.8%/-12.8% prior resp.
- AU Sep. Private Sector Credit out at +0.3% m/m, +4.0% y/y vs. 0.2%/3.9% expected and 0.2%/4.1% prior resp.
- JP Sep. Labour Cash Earnings out at flat y/y vs. -0.4% expected and revised flat prior
- NZ Sep. M3 Money Supply out at +6.4% y/y vs. revised 7.1% prior
- SI Q3 Unemployment Rate out at 1.9% vs. 2.0% expected and 2.0% prior
(All Times GMT)
- JP Construction Orders (0500)
- JP Housing Starts (0500)
- GE Retail Sales (0700)
- Norway Unemployment Rate (0900)
- Norway Credit Indicator Growth (0900)
- Norway Retail Sales (0900)
- EU Euro-zone CPI Estimate (1000)
- EU Euro-zone Unemployment Rate (1000)
- US MBA Mortgage Applications (1100)
- CA GDP – Aug. (1230)
- US Employment Cost Index (1230)
- US NAPM – Milwaukee (1300)
- Norway Norges Bank Rate Announcement (1300)
- US Chicago PMI (1345)
- UK BOE’s Bean to speak (1800)