Asian Equities Rally on Heightened Hopes of Chinese and ECB Support
May 12, 2014
Stocks in the Pacific Rim advanced by 2.4% in Indonesia, 2.2% in China, and 1.8% in Hong Kong. Japan’s Nikkei slipped 0.4%, but share prices in Europe are up 0.8% in Germany and Italy, 0.4% in Spain, 0.3% in Britain, and 0.2% in Switzerland.
Draghi’s press conference remark on Thursday that the Council is comfortable about acting next month has fortified sentiment, even though German press reports claim the comment was not authorized at the meeting. Rumors surfaced that Beijing’s government will introduce measure to support equities.
The dollar has dipped 0.2% versus the Australian dollar, kiwi and sterling and by 0.1% relative to the loonie. EUR/USD is unchanged, and the dollar has edged up 0.1% against the yen, Swiss franc and Chinese yuan.
The yields on ten-year British gilts and German bunds rose by five and one basis points, while the 10-year JGB yield remained steady.
Gold and oil are firmer at $1,295.30 per ounce and $100.48 per barrel.
Japan’s JPY 116 billion current account surplus in March was only less than half what analysts were expecting and sharply down form JPY 1.283 trillion in March 2013. The seasonally adjusted current account deficit ballooned to JPY 783 billion from 36 billion yen in February. Merchandise exports slumped 4.8% on month, while imports jumped 5.9%. The fiscal 2013 current account surplus of 7.9 trillion yen was down from JPY 42.2 trillion in fiscal 2012.
Japanese bank lending grew 2.1% on year in April, a touch less than the 2.2% pace in the first quarter of 2014 and last quarter of 2013.
Japan’s economy watchers index, a diffusion gauge that reflects service sector conditions plunged to 41.6 in April from March’s reading of 57.9. However, the outlook component rebounded to a score of 50.3 from 34.7 in March.
Japanese bankruptcies were 1.7% greater in April than a year earlier after posting a 12.4% on-year contraction in March.
New bank lending in China last month of CNY 775 billion fell short of expectations, but on-year M2 money growth of 13.2% accelerated more than forecast to 13.2% from 12.1% in March.
National Australia Bank’s indices of business confidence in that economy recovered two points to +6 in April after falling five points between January and March. But business conditions dipped back to zero, same as February’s reading, from +1.
New Zealand home sales fell 20.2% on year in April, twice as much as in March.
According to the Bank of France, French business sentiment returned to February’s 98 reading in April from 96 in March. That’s still shy of readings of 101 in November and 100 in December. The French central bank expects French GDP to grow 0.2% this quarter.
Ireland’s construction purchasing managers index climbed for a third straight time to 63.5 in April from 60.2 in March 56.2 in February and 54.7 in January.
Swiss retail sales volume rose 1.0% on month and 3.0% on year in March, beating expectations.
On-year Czech CPI inflation of 0.1% last month was the lowest in four and a half years. The Czech jobless rate settled back to 7.9% in April from 8.3% in March. Danish CPI inflation picked up to a still-subdued 0.7% in April from 0.4% in March. Romanian CPI inflation of 1.2% last month was up from 1.0% in March.
Romanian industrial production posted strong advances of 1.1% on month and 11.6% on year in March. Malaysian industrial output fell 2.6% in March and a smaller 4.3% 12-month rate of increase.
The U.S. April budget statement gets released today. Fed officials Plosser and Lockhart speak publicly.
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.