Economic data released through the Asian session this morning. Included 4th quarter inflation numbers out of New Zealand. And December trade data out of Japan. Outside of the numbers. The Bank of Japan delivered its first monetary policy decision of the year. Later on in the morning. BoJ Kuroda will also be delivering the BoJ’s press conference.
Inflation rose by 1.9% in the 4th quarter. Year-on-year, coming in ahead of a forecasted 1.8%. Whilst in line with the 3rd quarter’s 1.9%. Quarter-on-quarter, consumer prices rose by 0.1%. Coming in ahead of a forecasted stall. While down from the 3rd quarter’s 0.9%. According to figures released by NZ Stats.
- The average price for petrol fell by 0.6%. Quarter-on-quarter, which was the first quarterly fall since Sept-17.
- Prices for cigarettes and tobacco fell for the first time since Dec-09. Down by 1.3%, the fall coming ahead of a 10% increase in excise tax on 1
- Contributing to the 0.1% rise was seasonal rises in international airfares. Which offset a seasonal fall in prices for vegetables.
- Prices for telecom services rose by 1%. With prices for games toys. and hobbies also on the rise in the quarter.
The trade deficit narrowed from ¥738bn to ¥55bn in December.
- Exports fell by 3.8%. Which was greater than a forecasted 1.9% decline. Following a 0.1% rise in November and the largest fall since 2016.
- Imports rose by 1.9%. Coming up short of a forecasted 3.7%. and well below a 12.5% jump in November.
- Exports to China slumped by 7%. With total exports to Asia sliding by 6.9%. Reflecting the effects of the ongoing U.S – China trade war.
- Exports to the U.S rose by 1.6%. While imports from the U.S jumped by 23.9%. The narrowing trend in Japan’s surplus. with the U.S coming off the back of the threat of tariffs on Japanese goods.
it’s a quiet day ahead on the data front. Leaving the markets to consider tomorrow’s ECB policy decision. and the all-important Draghi press conference. Ahead of the policy decision will be prelim January private sector. PMI numbers that will likely garner plenty of attention on Thursday morning.
The IMF and Bank of Italy have certainly given Draghi. a reason to tow the dovish line. But how dovish remains to be seen as the Central Bank. looks to ease off on the stimulus front.
Economic data is limited to January’s CBI Industrial Trend Orders. Which will provide the Pound with direction upon release. While the fate of the Pound continues to sit in the hands of Brexit. As the markets begin to see the prospects of a no deal Brexit diminish. The Pound will continue to see upward momentum. Particularly if the stats are on the positive side.
There are no material stats scheduled for release through the day. Leaving the Dollar in the hands of Capitol Hill and the Oval Office.
Mixed reports over progress on trade talks between the U.S and China. and rumours of the end of January meeting. being cancelled will be a test for the markets later in the day.
To add to the Dollar’s troubles is the ongoing government shutdown, with updates likely to be hitting the news wires through the day.
Following some disappointing numbers out of Canada on Tuesday. Focus shifts to November retail sales figures due out later today. While inflation numbers had provided some much needed support last week. Today’s stats will need to impress to shift sentiment towards BoC policy. Forecasts are Loonie negative.
Outside of the stats, the direction of crude oil prices will continue to influence, with today’s API numbers and further chatter on trade to also impact.