Crowd-Pleasing Chinese March Trade Data
April 13, 2016
Investors had already been in a risk-on frame of mind because of the upcoming OPEC meeting to freeze production and lend support to oil prices.
Chinese trade figures released overnight suggest that economy’s slowdown may be stabilizing and boosted stock and commodity prices further.
Chinese exports recorded on-year positive growth of 11.5%, their first rise since June and the greatest advance since February 2015. Imports posted the same 13.8% on-year drop as in February, and the trade surplus of $29.86 was down from $32.59 the month before. The surplus averaged $49.5 billion per month in 2015.
Equities climbed overnight by 3.4% in Hong Kong, 2.8% in Japan, 2.7% in Singapore, 1.9% in India, 1.4% in China and Taiwan, 0.9% in New Zealand and 1.6% in Australia. Gains in Europe thus far range from 1.3% in the U.K. and 1.4% in Switzerland to 2.1% in Germany, 2.5% in France, 2.2% in Spain and 3.5% in Italy.
West Texas Intermediate oil settled back 1.1% to $41.71 per barrel, and Comex gold dropped 1.0% to $1,243.51. But copper, Iron ore and aluminum are each up sharply.
The dollar has risen 0.8% against the Swiss franc, 0.7% versus the euro, 0.6% relative to the yen, 0.3% vis-a-vis the loonie and Aussie dollar, 0.2% against the yuan and 0.1% relative to sterling.
Ten-year German bunds and British gilt yields are unchanged. The 10-year Japanese JGB rose 3 basis points.
The Central Bank of Chile left its policy interest rate unchanged at 3.5%, where such has been since a 25-basis point hike in December. More increases are coming eventually as part of rate normalization.
Japanese on-year M2 money growth was 3.2% in both March and the first quarter, down from 3.4% in the prior quarter and 3.7% in 2015. Growth in broad liquidity also slowed.
Japanese domestic corporate goods prices dipped 0.1% on month in March, resulting in the largest on-year drop (3.8%) in five months. Export and import prices were 4.8% and 15.6% lower than a year earlier.
The Westpac gauge of Australian consumer sentiment followed up a 2.2% decline in March with a 4.0% plunge in April. Sentiment had risen 4.2% in February.
New Zealand food prices rose 0.8% in March but were still 0.1% lower than a year earlier.
Industrial production in Euroland fell back 0.8% in February, cutting the 12-month increase from 2.9% posted in January to just 0.8% in the latest month. Production declined on month in Germany, France, Italy, Spain, Greece, and Ireland. Output in January-February combined was higher than the 4Q mean, however.
French consumer prices recorded a 0.1% on-year dip in March versus a decline of 0.2% in February and a rise of 0.2% in January. In the year to March, energy plunged 6.9%, but services rose 0.9%.
Spanish consumer prices in March were 0.8% lower than a year earlier despite a 0.6% month-on-month increase.
Investors await the release of U.S. retail sales, Fed Beige Book and producer prices later today as well as an interest rate announcement from the Bank of Canada, which is not expected to change policy.
Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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