Morning Market Update – Chinese Data Shows Weaker Signals

So Far

The recent survey from Westpac Bank revealed that Australia’s Consumer confidence slipped down in April and reduced by 0.7% from a score of 99.0%. The bank said that the consumer confidence reading showed an ease in consumer spending, keeping the consumption trends positive.

China’s Producer Price Index (PPI) data backed-off from the highest level since 2008. However, it remained firm and came in line with the approximate score of 7.5%. China’s Consumer Price Index (CPI) fell down at 0.9% (y/y) versus the expected score of 1.0% and the cost of living dropped by 0.3% (MoM).

The People’s Bank of China (PBOC) set the USD/CNY pair at 6.8940 versus yesterday’s fix of 6.8903. Overall, the Chinese data shows weaker signals and has not grabbed the market attention today.

The central bank’s decision to reduce its buying of 3 – 5 year range of Japanese Government Bonds (JGB) didn’t come as a surprise to the markets.

BOJ’s Governor Kuroda said that the inflation target of 2% can be reached quickly if the monetary policy is directed at price stability and does not target the Forex markets. Also, he stated that a weaker yen would help in achieving the inflation target more quickly.

Coming Up

Moving on for the day, we have Germany’s Wholesale Price Index to be released by the Statistisches Bundesamt for both (MoM) and (YoY). The index gives out a little indication for any downslide and we expect the index to rise furthermore.

The ILO Unemployment Rate released by the National Statistics should provide a solid support for the pound and gain some movement in the market. We must look out for the BOE’s Governor Mike Carney’s speech about the pound which may boost its growth.

The Bank of Canada (BoC) and BoC’s monetary policy report has maintained steady 0.5% rate since mid of last year. We should watch out for the BOC’s Interest Rate decision today.

The foreign investment in Japanese stocks and foreign bond investments have been growing stronger since the start of the week. The dollar may see a slight decline today with the import price index signaling a weak data for (MOM).  We end the day with the monthly budget statement for the dollar as it will give an insight as to where the dollar may be headed.
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