Risk-taking was the name of the game during the Asian session, as market players took the opportunity to scoop higher-yielding bets on a quiet trading day.
- China’s markets out on a week-long holiday
- Japan prints first trade deficit in eight months
- U.K.’s Rightmove house price index improves from 0.7% to 0.8% in February
Japan’s trade deficit
Earlier today we saw the world’s third largest economy print its first trade deficit for the first time in eight months.
Japan’s exports jumped by 12.2% from a year earlier in January, which is higher than December’s 10.3% growth AND marks the 14th consecutive month of increase for Japan’s shipments.
A closer look tells us that machinery (+19.6%), chemicals (+17.3%), manufactured goods (+14.3%), electrical machinery (+11.6%), and cars (+6.6%) clocked in bigger shipments.
Meanwhile, imports only grew by 7.9% when analysts had expected an 8.3% growth. As weak as the uptick was, however, it was to propel imports to its highest value in three years.
The increase in crude oil prices ended up overshadowing the increase in exports, which dragged Japan’s trade balance from a surplus of 373.3B JPY in December to a deficit of 943.4B JPY in January.
Overall risk appetite
With not a lot of major reports printed and with China’s markets out on a week-long holiday, market players focused on buying higher-yielding bets across the board.
- Nikkei is up by 1.56% to 22,059.8;
- Australia’s A SX 200 is up by 0.90% to 5,936.5, and
- Hang Seng is up by 1.97% to 3,199.159.
Even gold and oil prices boarded the risk appetite train.
- Gold is up by 0.10% to $1,348.16;
- Brent crude oil is 0.80% higher to $65.37, and
- U.S. WTI is up by a cool 1.40% to $62.48.
Major Market Mover(s):
Not surprisingly, the bout of risk-taking was a boon to higher-yielding currencies like commodity-related currencies and a bane to low-yielders like the yen.
AUD/USD is up by 6 pips (+0.06%) to .9934;
AUD/JPY is up by 23 pips (+0.24%) to 84.27;
USD/CAD is down by 18 pips (-0.14%) to 1.2537;
CAD/JPY is down by 22 pips (-0.26%) to 84.82;
NZD/USD is up by 5 pips (+0.06%) to .7395, and
NZD/JPY is up by 11 pips (+0.14%) to 78.63.
Watch Out For:
- 9:00 am GMT: Euro Zone’s current account (30.5B EUR expected, 32.5B EUR previous)
- 11:00 am GMT: German Bundesbank monthly report