- Its another busy data calendar coming up in Asia tomorrow, Wednesday, 1 February 2023
- December: Australian CPI surging, retail sales slumped - is RBA credibility on the line?
- FX option expiries for Tuesday, 31 January 2023 at the 10am New York cut
- NZD/USD dipping lower - a bit of political news out of New Zealand
- The US is weighing cutting off Huawei from American suppliers over security concerns
- Couple of China headlines subduing the mood
- IMF global outlook - "Inflation peaking amid low growth" - raises its global GDP forecast
- China January official PMI: Manufacturing 50.1 (expected 49.8) Services 54.4 (expect 52.0)
- PBOC sets USD/ CNY central rate at 6.7604 (vs. estimate at 6.7607)
- Chinese state financial media say state banks are offering cheap loans to spur consumption
- Deutsche Bank forecast 25bp rate hikes from the RBA in February, March, May and August
- Australia December retail sales -3.9% m/m (expected -0.3%)
- Australian December Private Sector Credit 0.3% m/m (expected 0.5%)
- China and Saudi Arabia are in talks to set up a China-Gulf free trade zone "ASAP"
- Japan preliminary December Industrial Production -0.1% m/m (expected -1.2%)
- Japan finance minister Suzuki says too early to decide if the BOJ agreement needs revision
- Japan December 2022 unemployment rate 2.5% (expected 2.5%)
- Forexlive Americas FX news wrap: US dollar moves higher as the market gears up for the Fed
- South Korean December data - retail sales up m/m, industrial production down m/m
- Australian retail sales data due today - "risk firmly to the downside"
- 25bp rate hike on Wednesday, but Federal Open Market Committee (FOMC) hikes not yet done
- Trade ideas thread - Tuesday, 31 January 2023
It was a data-heavy day in Asia with some FX response. The response was limited though as traders counted down to the Federal Reserve, European Central Bank and Bank of England later this week.
From Australia today we had awfully weak retail sales numbers come through for December. Apart from COVID-times and the introduction of Australia’s value-added tax (the GST) the -3.9% m/m result for retail sales was the worst ever. There may well be some seasonal adjustment issues involved given the shift in the buying culture to November’s Black Friday and Cyber Monday sales. The weak sales numbers were compounded by slowing credit growth data from the Reserve Bank of Australia. Both business and housing credit growth slowed, reflecting rising interest rates and falling house prices.
AUD/USD and NZD/USD have dribbled a little lower during the session.
From China today we had official January PMIs, from China’s National Bureau of Statistics (NBS). Both manufacturing and services jumped back into expansion. January was the first full month of reopening for the country. Details of the manufacturing report showed 18 out of 21 manufacturing industries lifting higher in the month.
The International Monetary Fund (IMF) released its latest update to its views on the global economy. The organisation raised its 2023 global growth forecast to 2.9% (from its previous report forecast of 2.7% in October 2022) citing demand resilience in advanced economies, an easing back in rates of inflation, and China reopening. The IMF expect China's 2023 GDP growth at 5.2% (from 4.4% in October 2022 forecasts) with 2024 China growth unchanged at 4.5%.
AUD and NZD I’ve already mentions. USD/JPY has fallen a little on the session but has had a very limited range. USD/CAD added to its overnight gains. Oil remained on the soft side in Asia time. EUR, GBP are little net changed against the dollar. Gold has dropped back towards USD1920.
Asian equity markets:
Japan’s Nikkei 225 -0.1%
China’s Shanghai Composite -0.4%
Hong Kong’s Hang Seng -1%
South Korea’s KOSPI -0.4% (South Korean giant Samsung fell circa 3% after posting a 69% profit drop)
Australia’s S&P/ASX 200 -0.05%
Oil stayed heavy:
