31 August 2010 at 7:10 GMT
Australian data points in the other direction today
NZD takes an early hit as a leading finance company files for receivership
Market Comments:
The UK bank holiday took away some liquidity and dealing appetite early in the European session but as North America opened things got a touch more interesting. There was general mood of risk off during the session with Wall St giving back most of the gains from the post-Bernanke Friday session. The JPY continued its post-BOJ rally with the press conference adding little to deter bulls.
On the data front, US personal income/spending data was mixed – income a tad below forecast while spending a touch above. The Dallas Fed manufacturing activity index was also weak, adding to the general view of a slowing economy. On the European front, eurozone confidence indicators were also mixed and, in the risk-aversion mood, EUR struggled to hold its head above water, managing a slow, steady grind lower on the day.
Asia headed towards the month end with a slow start, most pairs extending the NY session’s “risk-off” mood. The NZD endured some additional pressure following headlines that one of New Zealand’s largest finance company, South Canterbury Finance, was filing for receivership this morning after its bid to recapitalize and restructure had failed. However the Kiwi saw a strong bounce once it was reported that the NZ government would pay out all depositors and stock holders of the finance company, totaling NZ$1.7 bln.
On the data front, Australian data pointed in the opposite direction to yesterday. Retail sales rose a more robust 0.7% m/m in July, stronger than June’s upwardly-revised 0.4%, as strong employment data and a changing interest rate outlook add to a more positive outlook for consumer sentiment. Building approvals also rebounded by an unexpected 2.3% m/m in July as market perceptions were for a 0.7% decline. However, the details painted a less rosy picture with most gains seen in the volatile private unit segment while owner-occupied building suffered a 0.1% m/m decline. Nevertheless, the two sets of data were enough to put the brakes on the AUD’s early slide but the rebound was relatively muted given that Asian bourses remained heavily in the red.
On the Japanese front, industrial production rose by a tepid 0.3% m/m (though above market expectations). Production continues to level off after the spurt seen at the start of the year as export growth moderates. Retail sales posted their second straight monthly gain, up 0.7% m/m versus an expected +0.4% and more than June’s 0.4%. Note the government’s incentive scheme for buying cars is set to lapse in September so data after that month may be a bit more relevant.
As we head into the month-end, fixing flows may gain more prominence as we approach the London and NY fixing times. The data calendar is quite heavily populated with Swiss consumption, German unemployment, UK consumer credit, mortgage approvals and money supply and CPI estimate and unemployment from the eurozone all slated for the European session. The North American session closes the month with Canada’s GDP numbers for June, US S&P Case-Shiller house prices, Chicago PMI and US consumer confidence.
Economic Data Highlights
- US Jul. Personal Income out at +0.2% vs. +0.3% expected and flat prior
- US Jul. Personal Spending out at +0.4% vs. +0.3% expected and flat prior
- US Aug. Dallas Fed Manufacturing Activity out at -13.5% vs. -10.0% expected and -21.0% prior
- NZ Jul. Building Permits out at +3.1% m/m vs. 2.0% expected and revised +3.3% prior
- UK Jul. GfK Consumer Confidence out at -18 vs. -24 expected and -22 prior
- JP Aug. Nomura/JMMA Manufacturing PMI out at 50.1 vs. 52.8 prior
- JP Jul. Industrial Production out at +0.3% m/m, +14.8% y/y vs. -0.2%/14.3% expected and -1.1%/17.3% prior resp.
- JP Jul. Retail Trade out at 0.7% m/m, 3.9% y/y vs. 0.5%/3.5% expected and 0.4%/3.3% prior resp.
- JP Jul. Lge Retailers’ sales out at -1.2% y/y vs. -1.3% expected and revised -3.1% prior
- AU Q2 C/a Bal. out at –A$5.64b vs. –A$6.5b expected and revised –A$16.457b prior
- AU Jul. Building Approvals out at 2.3% m/m, 11.0% y/y vs. -0.7%/6.1% expected and -3.3%/14.2% prior resp.
- AU Jul. Retail Sales out at +0.7% m/m vs. +0.4% expected and revised +0.4% prior
- AU Jul. Private Sector Credit out at 0.1% m/m, 2.8% y/y vs. 0.3%/3.0% expected and 0.2%/2.9% prior resp.
- JP Jul. Housing Starts out at +4.3% y/y vs. 2.0% expected and 0.6% prior
- JP Aug. Small Business Confidence out at 48.4 vs. 48.1 prior
Upcoming Economic Calendar Highlights
(All Times GMT)
- Swiss UBS Consumption Indicator (0600)
- GE Unemployment Rate (0755)
- UK M4 Money Supply (0830)
- UK Net Consumer Credit (0830)
- UK Mortgage Approvals (0830)
- EU Euro-zone CPI Estimate (0900)
- EU Euro-zone Unemployment (0900)
- CA GDP (1230)
- US S&P/CaseShiller House Price Index (1300)
- US Chicago PMI (1345)
- US Consumer Confidence (1400)
- US NAPM Milwaukee (1400)