- European Central Bank speakers on the agenda for Wednesday, 1 March 2023
- Free flights to Hong Kong will kick off from March 1. Yes, for real.
- Bank of England Governor Bailey is speaking on inflation today, Wednesday, 1 March 2023
- China's finance minister says will increase fiscal spending this year
- China Caixin Manufacturing PMI comes in at 51.6 in February (prior 49.2)
- BOJ's Nakagawa says easy monetary policy is important for the time being, supports economy
- China official February PMIs: Manufacturing 52.6 (prior 50.1) Services 56.3 (prior 54.4)
- PBOC sets USD/ CNY central rate at 6.9400 (vs. estimate at 6.9409)
- Australian dollar (AUD/USD) marked down on lower inflation data and a big miss for Q4 GDP
- Australian monthly CPI (January) 7.4% (expected 8.1%)
- Australian Q4 2022 GDP 0.5% q/q (expected +0.8%)
- Japan Jibun February final Manufacturing PMI 47.7 (preliminary was 47.4, prior 48.9)
- UK data - February Shop Price Index to a record high of +8.4% y/y (prior +8.0%)
- Goldman Sachs CEO says inflation is going to be even more sticky - bumpy 18 months ahead
- Around 1.9 mn barrels of Russian diesel-type fuel currently in floating storage - no bids
- JP Morgan says EUR/USD fair value (short term models) ranges between 1.07-1.09
- Australian Industry Index rose in February but stayed in contraction
- Australian February (final) Manufacturing PMI 50.5 (flash was 50.1, prior 50)
- S&P 500 failed to breakout of the potential bull flag and bears take charge
- New Zealand building permits (January) -1.5% m/m (prior -7.2%)
- Trade ideas thread - Wednesday, 1 March 2023
- Oil - private survey of inventory shows much larger build than was expected
- Major US indices close the day lower. For the month, major indices close down.
- Forexlive Americas FX news wrap: US dollar rebounds late as the month winds down
China’s National Bureau of Statistics PMIs showed a huge jump for manufacturing (52.6 in February, its highest since April 2012, from 50.1 in January) and non-manufacturing (56.3 from 54.4) today. Hong Kong stocks have surged, the Hang Seng is up around 3%, while on mainland China the Shanghai Composite is up around 0.8%. An underpinning of equity markets, by whatever it takes really, was expected with the national parliament opening this coming weekend:
Prior to the Chinese data we had Q4 GDP and January month inflation data from Australia. In a nutshell, GDP missed its central estimate, while the monthly CPI dropped to 7.4% from 8.4% in December. The figures were suggestive that inflation has peaked in Australia. RBA rate hike expectations ahead, and the Australian dollar, were both marked down. AUD/USD dropped briefly under 0.6700.
Reality came back to bite, though. The monthly CPI is only a (very) imperfect guide to what the official quarterly CPI might be. As I have posted previously, monthly inflation data from Australia is a proxy for the more thorough quarterly figure:
- it provides a more timely view on inflation
- but it is an incomplete update, only an approximation
- it covers around 60% of price updates, and today’s January data only applies to the first month of the quarter (d'uh)
- analysts pointed out especially poor coverage of market services components of the inflation basket this month
And, 7.4% is more than two times higher than the upper limit of the RBA’s target band, 2 to 3%, for inflation.
AUD/USD soon surged back higher, making a fresh high for the session above 0.6745. Its around there as I post.
USD/JPY rose in a fairly steady fashion, adding on 60 or so points from its US Tuesday afternoon lows. Junko Nakagawa, policy board member at the Bank of Japan spoke during the session. She did not give any indication of being in favour of any near-term policy change away from loose policy.
Otherwise the USD has fallen against other major FX. CAD, NZD, EUR, CHF are all a little higher on the day. GBP is line ball unchanged.
Asian equity markets:
Japan’s Nikkei 225 +0.16%
China’s Shanghai Composite +0.9%
Hong Kong’s Hang Seng +3.1%
South Korea’s KOSPI closed for a holiday
Australia’s S&P/ASX 200 +0.16%
AUD update:
