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Asian Market Update: March 11, 2013

Published 03/11/2013, 08:33 AM
Updated 01/01/2017, 02:20 AM
China output and retail sales growth slows while rising food prices boost CPI to 10-month highs

Economic Data

(CN) CHINA FEBRUARY CONSUMER PRICE INDEX (CPI) Y/Y: 3.2% V 3.0%E (10-month high), M/M: 1.1% (13-month high); PRODUCER PRICE INDEX (PPI) Y/Y: -1.6% V -1.5%E

(CN) CHINA FEBRUARY NEW YUAN LOANS (CNY): 620B V 750BE (v 711B y/y)

(CN) CHINA JANUARY-FEBRUARY RETAIL SALES Y/Y: 12.3% V 15.0%E (multi-year low)

(CN) CHINA JANUARY-FEBRUARY INDUSTRIAL PRODUCTION Y/Y: 9.9% V 10.6%E (slowest Jan-Feb 2-month start to the year since 2009)

(CN) CHINA JANUARY-FEBRUARY URBAN FIXED ASSETS YTD Y/Y: 21.2% V 20.7%E (1-YEAR HIGH)

(CN) CHINA FEBRUARY M2 MONEY SUPPLY Y/Y: 15.2% V 14.9%E (19-month high); M1 MONEY SUPPLY Y/Y: 12.4% V 9.5%E

(CN) China February Aggregate Financing (CNY): 1.07T v 1.50Te

(JP) JAPAN JANUARY MACHINE ORDERS M/M: -13.1% V -1.7%E (1st decline in 4 months; biggest decline in 8 months); Y/Y: -9.7% V -0.3%E

(NZ) NEW ZEALAND FEBRUARY NZ CARD SPENDING RETAIL M/M: 0.8% V 0.5%E; TOTAL M/M: 0.8% V 0.4% PRIOR

(UK) UK FEBRUARY LLOYDS EMPLOYMENT CONFIDENCE: -44 V -45 PRIOR

Markets Snapshot (as of 03:30 GMT)

Nikkei225 +0.9%

S&P/ASX +0.3%

Kospi -0.3%

Shanghai Composite -0.3%

Hang Seng +0.4%

June S&P500 at 1,545

Apr gold +0.1% at $1,580/oz

Apr Crude Oil flat at $91.81/brl

Observations/Insights

High food prices sends February CPI to 10-month high 3.2% y/y and 13-month high m/m; Industrial production and retail sales growth at multi-month lows, while February lending undershoots estimates.

Analysts temper expectations for 2013 China potential GDP on disappointing industrial activity, attribute retail sales slowdown to crackdown on corruption.

NDRC analyst tempers inflation outlook for 2013 to around 3.0% vs 3.5% official goal set out by outgoing premier Wen.

Speakers/Political/In the Papers

(CN) China National Development and Reform Commission (NDRC)'s pricing department official: Sees 2013 CPI levels "around 3%" - financial press

(CN) China government to restructure Railways and Energy bodies.

(CN) Citigroup analyst: China retail sales was "hit hard" by frugality campaign - financial press.

(CN) Standard Chartered analyst: By mid-2013, China inflation issue should become increasingly concerning for policy makers - financial press.

(CN) Nomura analysts: Weak China industrial production data rising inflation reinforces the view that China potential GDP is down to 7.0-7.5% - financial press.

(CN) China Bank of Communications (BoCom) analyst: China lending will significantly rebound in March - Shanghai Daily.

(JP) Japan BOJ Gov-nominee Kuroda: Size and type of assets that BOJ buys now not enough to achieve 2% inflation; need to examine more effective easing methods; No need to purchase foreign bonds; type of assets held by BoJ important; To consider bringing forward open-ended asset purchase; to considering starting open-ended asset purchases earlier than current plan of 2014 - Parliamentary hearing.

(JP) Japan's Hamada (economic advisor to PM Abe): 2% inflation target is secondary; full recovery is the key even if CPI only reaches 1.5%

(NZ) According to Westpac analysts, RBNZ policy statement will "almost certainly" include reference to house prices rising too rapidly, and a warning it may have to raise interest rates by the end of the year - NZ press.

(AU) RBA's computer network said to have been infiltrated by malware originated in China - AFR.

(EG) Egypt said to be struggling in receiving commitment from the IMF to secure a $4.8B loan - FT.

(EG) Protesters in Egypt have burned Cairo buildings and have also attempted to disrupt shipping through the Suez Canal - US press.

(IT) Five Star Movement leader Grillo indicating he would quit politics if his party grants confidence to Bersani's Democratic Party (PD) to form a govt - financial press.

(GR) Greece PM Samaras: Promises not to launch any more austerity measures as Troika inspectors extend their visit by another week.

(DE) The new German party Alternative for Germany (AfD) calls for withdrawal from EMU - Telegraph's Ambrose Evans-Pritchard.

(EU) Germany Secretary General of the CSU (ruling coalition member) party Dobrindt: Reiterates Greece is still the primary risk to the euro zone and may still have to leave the euro - German press.

(EU) German Fin Min Schaeuble: UK exit from the EU would be catastrophic - Austrian press.

Fixed Income/Commodities

(AU) Australia Newcastle weekly coal exports for week ended Mar 11th: -6% w/w

Goldman Sachs analyst: Sees strong outlook for oil in the near term.

(EG) Protesters in Egypt have burned buildings in Cairo, and have also attempted to disrupt shipping through the Suez Canal - US press,

GLD: SPDR Gold Trust ETF daily holdings fall by 3.4 tons to 1,239.7 ton (lowest since 1233.6 in Oct of 2011) - update as of Mar 8.

Currencies

The EUR/USD pares opening losses, rising back above $1.30 despite the Italy downgrade by Fitch on Friday.

The USD/JPY consolidates above ¥96 as BOJ Gov nominee Kuroda makes his case before the opposition-led upper house of Parliament; Confirmation in both houses expected late in the week, paving the way for more aggressive easing steps at the April BOJ meeting.

The AUD/USD opens down over 30 pips below $1.02 handle in the wake of mixed economic data from China, before bouncing above $1.0220.

USD/SGD and USD/KRW at 6-month and 5-month highs respectively, tracking rising US treasury yields in the wake of strong non-farm payrolls on Friday.

Equities

BHP: CFO: Planning to sell about 10 company assets to help reduce debt levels as China demand slows - financial press.

LNC.AU: Reports first spudded well at Umiat oil field on Alaska's North Slope; On track for all stated objectives.

LEI.AU: Thiess unit awarded new contract on Chevron-operated Gorgon project for A$212M over 2 years to deliver a range of civil works.

Samsung 005930.KR: Judge Lucy Koh to allow Apple's separate 'Siri' case against Samsung to proceed.

Baosteel 600019.CN: To raise steel product prices for April (5th consecutive month)

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