MAJOR HEADLINES – PREVIOUS SESSION
- US Feb. NFIB Small Business Optimism out at 88.0 vs. 90.0 expected and 89.3 prior
- US IBD/TIPP Economic Optimism out at 45.4 vs. 47.5 expected and 46.8 prior
- NZ Q4 Terms of Trade out at +5.7% q/q vs. revised -1.6% prior
- US Weekly ABC Consumer Confidence out at -49 vs. -48 expected and -49 prior
- AU Mar. Westpac Consumer Confidence out at +0.2% vs. -2.6% prior
- JP Jan. Machine Orders out at -3.7% m/m, -1.1% y/y vs. -3.5%/-0.6% expected and 20.1%/-1.5% prior resp.
- JP Feb. Corporate Goods Prices out at +0.1% m/m, -1.5% y/y, both as expected vs. 0.3%/-2.1% prior resp.
- AU Jan. Home Loans out at -7.9% vs. +2.0% expected and revised -5.1% prior
- AU Jan. Value of Loans out at -5.0% m/m vs. -4.2% prior
- China Feb. Trade Balance out at +$7.61 bln vs. $7.15 bln expected and $14.17 bln prior
- China Feb. Exports out at +45.7% y/y vs. +38.3% expected and +21.0% prior
- China Feb. Imports out at +44.7% y/y vs. +38.0% expected and 85.5% prior
THEMES TO WATCH – UPCOMING SESSION
(All times GMT)
- GE Trade Balance (0700)
- GE CPI (0700)
- Sweden Industrial Orders (0830)
- Norway CPI (0900)
- Sweden Unemployment Rate (0900)
- UK Industrial/Manufacturing Production (0930)
- UK BOE’s Haldane to speak (1000)
- US Weekly MBA Mortgage Applications (1200)
- EU ECB’s Weber to speak (1230)
- US Wholesale Inventories (1500)
- EU ECB’s Trichet to speak (1800)
- US 10-year Note Auction (1800)
Market Comments:
It was another session with very little in the way of data releases to latch on to, so markets were left range-bound again overnight. A general mood of “risk off” permeated through markets for most of the early session, with the JPY and USD benefitting the most. GBP was hammered early in the session as a very weak trade number came on the back of soft RICS report. GBPUSD slumped to a one week low before staging a comeback into the close as risk appetite also reversed. EUR was also under early pressure as ratings agency Fitch was out on the wires saying the UK’s sovereign profile had deteriorated “pretty badly” while Portugal may be downgraded on insufficient fiscal measures. On the Greece front, they added that the current rating was appropriate but in Spain the macro risks remain high.
Yesterday’s US data releases were limited to small business optimism which deteriorated to 88.0 from 89.3 while the IBD/TIPP economic optimism reading also slid to 45.4 from 46.8 last. The weekly ABC consumer confidence reading remained pegged in the doldrums, staying constant at -49. The components of the details were almost unchanged from the previous week with views on the economy and personal finances unchanged at 8% and 44% respectively while buying climate crept up one point to 25%. The auction of $40 bln worth of 3-year notes was well received and this helped bonds to rally. The 10-year yield dipped 1bp to 3.71% and as a result USDJPY struggled to hold its position above 90.0.
Asia held tight ranges on what turned out to be a quiet day. The few data releases that were published had little impact on the currency levels. Australian consumer confidence rebounded in March, up 0.2% versus the 2.6% fall the previous month while home loans were a disappointing 7.9% lower. The largest fall was in the new approvals category which fell 13.2% and may fuel further talk that the RBA may adopt a less-hawkish approach at the next rate meeting.
Talking of rates, the RBNZ meeting early tomorrow will grab the attention though no actual move in rates is expected. Given that the RBNZ has said earlier that low rates would stay in place until “mid” 2010, markets will be eyeing the RBNZ statement for further clarification as to what “mid” means to them. Certainly data has been less than compelling of late with retails sales and consumer confidence easing back so there is a possibility that “mid” may be converted to “late”.
Late in the Asian morning saw the release of China’s trade data for February. Generally better than expected, exports were up 45.7% y/y versus 38.3% expected and imports were 44.7% higher than a year ago versus 38.0% expected. The trade surplus narrowed to $7.61 bln from $14.17 bln but this can be accounted for with the timing of the Lunar New year celebrations. Overall, a positive sign that world trade is finding its feet again.
Today’s data releases in Europe sees German trade data and CPI, Swiss industrial production and Norway’s PPI/CPI on the calendar. On the UK front we have industrial production/manufacturing production and a speech by BOE’s Haldane to look forward to. Things slow down into the North American session, with weekly MBA mortgage applications the only release scheduled.