There were no top-tier reports released today, so Asian session market players concentrated on weekend updates.
- New Zealand’s PPI input (q/q) jumps by 1.4% vs. 0.8% expected, 1.0% previous
- New Zealand’s PPI output (q/q) higher by 1.5% vs. 0.9% expected and previous
- Japan posts wider-than-expected trade deficit in October
- U.K.’s Rightmove house price index drops by 1.7% vs. 1.0% gain in October
Japan posts wider trade deficit in October
Data from Japan’s Ministry of Finance (MOF) showed the world’s third largest economy printing a wider trade deficit in October.
Japan posted a deficit of 449B JPY, which is A LOT wider than the 48B JPY deficit that analysts had estimated and the 279B JPY surplus printed in the same month last year.
A closer look tells us that imports had jumped by a whooping 19.9% from a year ago in October, thanks to bigger volumes of crude oil and liquified natural gas that pushed imports 20% higher.
The increase in purchases overshadowed the 8.2% annualized increase in exports, which was boosted by increased auto shipments to the U.S. and electronic component exports to China.
“APEC fail” for APEC leaders
For the first time EVER, Asia-Pacific Economic Cooperation (APEC) leaders failed to agree on a communique at the end of a summit.
Word around is that the U.S. wanted to mention the World Trade Organization (WTO) and the possibility of a reform. China, on the other hand, didn’t like the wording in the Leaders’ Declaration.
It also didn’t help that China’s Xi Jinping and U.S. VP Mike Pence traded sharp (verbal!) daggers at each other over the weekend.
Xi, for example, discouraged “unilateralism and protectionism,” adding that
“History has shown that confrontation, whether in the form of a cold war, a hot war or a trade war, produces no winners.”
Not one to be outstaged, Pence outright said that “China has taken advantage of the United States for many, many years and those days are over.”
He also contradicted Trump’s earlier remarks about the U.S. possibly reversing its tariffs on China’s goods by saying that “The U.S. will not change course until China changes its ways.”
Duhn duhn duhn dun.
Mixed market action
There were no market-moving data releases during the Asian session, so market players priced in mixed signals from Trump and Pence, as well as a bit of profit-taking from last week’s moves.
- Nikkei is up by 0.47% to 21,782.4
- A SX 200 is down by 0.59% to 5,700.2
- Hang Seng is up by 0.41% to 26,290.1
- Shanghai index is up by 0.22% to 2,685.102
Commodity prices were a little more positive, as dollar weakness and a bit of risk-taking pushed them higher.
- Gold is down by 0.03% to $1,220.73 per troy ounce
- Brent crude oil is up by 0.37% to $67.25 per barrel
- U.S. WTI is up by 0.47% to $57.29 per barrel
Major Market Mover(s):
NZD and AUD
New Zealand actually printed positive quarterly PPI input and output reports today, but concerns over the U.S.-China trade war eclipsed positive headlines and weighed on the Kiwi.
Meanwhile, the Aussie took hits from increased conflict between the U.S. and China as well as some gold weakness.
NZD/USD is down by 28 pips (-0.41%) to .6849; NZD/JPY is down by 39 pips (-0.50%) to 77.20; EUR/NZD is up by 61 pips (+0.36%) to 1.6650; GBP/NZD is up by 106 pips (+0.57%) to 1.8738, and AUD/NZD is up by 23 pips (+0.32%) to 1.0676.
AUD/USD is down by 17 pips (-0.23%) to .7313; AUD/JPY is down by 26 pips (-0.32%) to 82.43; AUD/CHF is down by 16 pips (-0.21%) to .7312; EUR/AUD is up by 28 pips (+0.18%) to 1.5594, and GBP/AUD is up by 69 pips (+0.40%) to 1.7549.
There were plenty of Brexit-related headlines over the weekend, but optimism won ahead of Therese May’s trip to Brussels to get a final deal that she hopes to sell to her MPs.
GBP/USD is up by 12 pips (+0.09%) to 1.2834; EUR/GBP is down by 8 pips (-0.09%) to .8859; GBP/CHF is up by 16 pips (+0.13%) to 1.2833, and GBP/CAD is up by 30 pips (+0.18%) to 1.6890.
Watch Out For:
- Eurogroup meetings start today
- 9:00 am GMT: Euro Zone’s current account (24.2B EUR expected, 23.9B EUR previous)
- 9:00 am GMT: ECB’s financial stability review
- 11:00 am GMT: Germany’s Bundesbank monthly report