Asian currency markets saw a slow extension of the themes that emerged overnight – currencies posting mild gains against the US dollar while JPY crosses remained supported.
The announcement of China’s new leadership was a main draw (and at time of publishing we are still awaiting official confirmation) but ahead of that we had some minor data points to focus on.
New Zealand had a small ray of sunshine after the depressing data of late as consumer confidence rose for the first time in 3 months in November. ANZ’s latest sentiment index rose 3.3 percent from a month ago after a 1.3 percent decline the previous month with an improved outlook for family finances and a more positive vibe for the economy in one year’s time.
From Australia, consumer inflation expectations eased in November to 2.2 percent y/y from 2.6 percent previously, despite the recent uptick in the current inflation rate (Q3 trimmed mead CPI rose to 2.6 percent y/y from 2.2 percent). New vehicle sales fell back 2.8 percent on-month and posted slower annual growth of 8.6 percent from 14.1 percent
Fed’s Williams remarked that the Fed’s super-easy monetary policy was gaining traction in the economy compared to a year ago, noting specifically the improvement in the housing sector, adding that quantitative easing was still mainly having the positive effects the Fed wants to see.
Bad loans among Chinese banks increased for a fourth straight quarter as the recent economic slowdown takes its toll. Bad loans were higher across all types of banking institutions, increasing by 22.4 bln yuan ($3.6 bln). The banking regulator noted that non-performing loans accounted for 0.95 percent of banks’ total advances in the 3 months to September, up from 0.94 percent in the previous one.
The JPY was top of the league in the move stakes overnight as PM Noda’s announcement late yesterday of a December 16 election took its toll on the JPY. USD/JPY and EUR/JPY rallied to one-week highs. The rally in EUR/JPY helped prevent a slide in the EUR following more weak data from the eurozone – eurozone industrial production down 2.5 percent m/m in September, Greek GDP -7.2 percent y/y in Q3 with Portugal -3.4 percent y/y in the same period. GBP underperformed following a weaker than expected unemployment report and BOE’s King reporting that the UK economy was “not well.”
The US session saw further USD weakness as October FOMC minutes showed a number of members favoured extending QE into 2013 while concerns still lingered about the looming fiscal cliff as Obama reiterated his stance against extending Bush-era tax cuts. US data releases were also weak – producer prices, both headline and core, were negative month-on-month while advance retail sales fell victim to super-storm Sandy’s influence, declining 0.3 percent on-month with sales ex-autos/gas also down 0.3 percent. Business inventories were the only mild positive with a 0.7 percent m/m increase.
Data Highlights
- US MBA Mortgage Applications out at +12.6% vs. -5.0% prior
- US October PPI out at -0.2% m/m, +2.3% y/y vs. +0.2%/+2.6% expected and 1.1%/2.1% prior resp.
- US October Core PPI out at -0.2% m/m, +2.1% y/y vs. 0.1%/2.4% expected and flat/2.3% prior resp.
- US October Advance Retail Sales out at -0.3% m/m vs. -0.2% expected and revised +1.3% prior
- US October Retail Sales Ex-autos/gas out at -0.3% m/m vs. +0.4% expected and revised +1.0% prior
- US Sep. Business Inventories out at +0.7% m/m vs. +0.6% expected and +0.6% prior
- NZ October Job Advertisements out at -0.8% m/m vs. revised -3.0% prior
- NZ October Business PMI out at 50.5 vs. revised 48.5 prior
- JP Q3 Housing Loans out at +3.0% y/y vs. +2.7% prior
- NZ November ANZ Consumer Confidence out at +3.3% vs. -1.3% prior
- AU November Consumer Inflation Expectations out at +2.2% vs. 2.6% prior
- AU October New Vehicle Sales out at -2.8% m/m, +8.6% y/y vs. revised +4.6%/+14.1% prior resp.
(All Times GMT)
- SI Retail Sales (0500)
- GE Q3 GDP (0700)
- Sweden Unemployment Rate (0830)
- Norway Trade Balance (0900)
- EU ECB Monthly Report (0900)
- UK Retail Sales (0930)
- EU Eurozone CPI (1000)
- EU ECB’s Asmussen to speak (1000)
- EU Euro-zone GDP (1000)
- CA Manufacturing Sales (1330)
- US CPI (1330)
- US Empire Manufacturing (1330)
- US Initial Jobless Claims (1330)
- CA Existing Home Sales (1400)
- US Fed’s Lacker to speak (1400)
- US Bloomberg Consumer Comfort (1445)
- US Philadelphia Fed Index (1500)