First, the important economic releases and news over the weekend:
- China February CPI 3.2% y/y (vs. 3.0% y/y expected)
- China February PPI -1.6% y/y (vs. -1.5% y/y expected)
- China February Industrial Production 9.9% y/y (vs. +10.3% y/y expected)
- China February Fixed Assets Investment 21.2% y/y (vs. +20.7% y/y expected)
- China February Retail Sales 12.3% y/y (vs. +15.0% y/y expected)
- China February New Yuan Loans 620bn (vs. 700bn expected)
- China February M2 money supply +15.2% (vs. +14.9% expected)
- Reuters: China data show uneven economic recovery, policy dilemma
- Australian state election result highlight federal government’s electoral woes ahead of September poll
- German finmin Schaeuble thinks the UK leaving the EU would be a catastrophe
- German Economy Minister Roesler: Will fight attempts to weaken the euro
And from Monday:
- New Zealand February card spending (retail) +0.8% m/m (vs. +0.5% expected)
- Data: New Zealand February card spending (total) +0.8% m/m (vs. +0.4% prior)
- Japan February money stock M2 +2.9% y/y (vs. +2.7% expected)
- Japan February money stock M3 +2.4% y/y (vs. +2.3% expected)
- Japan January Machine Orders -13.1% m/m (vs. -1.7% expected). This is the first fall in 4 months.
- Japan January Machine Orders -9.7% y/y (vs. -0.3% expected)
- February Lloyds TSB consumer/employment confidence -44 (vs. -45 prior)
- Nominee for BOJ head Haruhiko Kuroda appeared before the Japanese parliament’s upper house for his confirmation hearing; his comments came as no surprise, “Existing asset purchases not enough to meet price target”, “Will consider bringing forward open-ended asset purchases”, “No need to purchase foreign bonds”, “BOJ will consider buying derivatives”, and so on.
- BOJ policy board member Ishida also spoke today, again saying nothing surprising, along the lines of “BOJ will pursue aggressive easing”, and emphasizing the importance of government fiscal discipline also.
- John Longworth, director general of the British Chambers of Commerce said the UK economy may need ‘shock treatment’ soon
- Nth. Korea has cut the hotline with Seoul, and now threatens to also cut the line with UN forces at Pammunjom
- The RBA’s computer networks have been “repeatedly and successfully hacked in a series of cyber-attacks to infiltrate sensitive internal information”. Later the RBA issued a media release regarding cyber security.
AUD/USD opened thirty points lower this morning in early New Zealand trade after higher Chinese inflation and weaker Chinese growth was reported over the weekend. It tested below 1.0205 but found supports at 1.0200. Exporter buying and importer selling held it in a tight range for much of the morning, but it eventually traded higher to 1.0228 to nearly fill the gap. NZD/USD traded in a similar pattern, but it more than filled its gap.
EUR/USD had a 25-point range, finding support around 1.2980 and ticking back as high as 1.3005/10.
USD/JPY had a very tight range despite the comments from Kuroda. It found good support around 96.00 but couldn’t over come selling ahead of 96.30.
