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15 Apr 2015
Aus cons sentiment, RBNZ’s Spencer, China Q1 GDP in focus - Westpac
FXStreet (Bali) - Australia Westpac-MI Apr consumer sentiment, RBNZ’s Spencer speech and China Q1 GDP are the main events to keep an eye on during the next Asian session, with Sean Callow, FX Strategist at Westpac, breaking down an analysis of what the bank expects.
Key Quotes
Australia Westpac-MI Apr consumer sentiment will be released at 10:30am Syd/8:30am Sing/HK. The index held on to most of Feb’s rate cut gains in Mar when it was at the neutral level of 99.5. Since then, we have had much media coverage of the RBA, which left rates unchanged, and falling iron ore prices. Political factors such as government popularity and tax could also weigh.
RBNZ’s Spencer speaks on housing from 10:30am Syd/8:30am Sing/HK. The global dairy auction will be held during the Lon/NY session. The last auction saw the drought premium reversed, with the index down 10.8% and whole milk powder -13.3%.
China Q1 GDP is out at 10am Beijing/12pm Syd. The official growth target for this year is at “around 7%”. The market median is 7.0%, though there are quite a few forecasts with a 6 handle (Westpac 7.1%). A low print should fuel further speculation of easing from the PBoC. China Mar industrial production will be released at the same time. Market consensus is at 7.0%, after a combined Jan-Feb print of 6.8%, the lowest since early 2009. Readings on retail sales and fixed asset investment should draw limited attention. We will also see Singapore Feb retail sales at 1pm Sing/HK/3pm Syd.
The ECB Governing Council policy meeting has been brought forward one day due to commitments in Washington DC later in the week for the IMF/World Bank spring meetings, including a G20 meeting (statement on Friday). There is no tension over the policy stance, with the EUR60bn monthly purchases of public sector bonds to continue. President Draghi will again have to walk a fine line between welcoming improvement in certain economic indicators e.g. PMIs and reiterating the commitment to pursuing QE to at least Sep 2016. He is likely to take questions on the possibility of reducing QE ahead of schedule but should point to the fact that inflation is still nowhere near the (“close to”) 2% target. Obviously there will also be questions on Greece but the key debate remains between politicians, not the ECB.
US Mar IP is likely to be soft again, -0.3%. There was a small bounce of 0.1% in Feb, but we have had weaker signals from ISM factory orders/production and auto orders, and will probably also have a pullback in utilities. US NAHB housing market index is seen to pick up from 53 in Mar to 55, after house sales picked up recently. The NY Fed’s Empire State manufacturing survey is forecast at 7.2, well below the readings of around 20 in mid-2014; Apr data however is often disappointing. We also have the Fed’s Beige Book of regional economic anecdotes. The Bank of Canada will decide on policy. Rates are expected to remain firmly on hold at 0.75% but the statement is always of interest.
Key Quotes
Australia Westpac-MI Apr consumer sentiment will be released at 10:30am Syd/8:30am Sing/HK. The index held on to most of Feb’s rate cut gains in Mar when it was at the neutral level of 99.5. Since then, we have had much media coverage of the RBA, which left rates unchanged, and falling iron ore prices. Political factors such as government popularity and tax could also weigh.
RBNZ’s Spencer speaks on housing from 10:30am Syd/8:30am Sing/HK. The global dairy auction will be held during the Lon/NY session. The last auction saw the drought premium reversed, with the index down 10.8% and whole milk powder -13.3%.
China Q1 GDP is out at 10am Beijing/12pm Syd. The official growth target for this year is at “around 7%”. The market median is 7.0%, though there are quite a few forecasts with a 6 handle (Westpac 7.1%). A low print should fuel further speculation of easing from the PBoC. China Mar industrial production will be released at the same time. Market consensus is at 7.0%, after a combined Jan-Feb print of 6.8%, the lowest since early 2009. Readings on retail sales and fixed asset investment should draw limited attention. We will also see Singapore Feb retail sales at 1pm Sing/HK/3pm Syd.
The ECB Governing Council policy meeting has been brought forward one day due to commitments in Washington DC later in the week for the IMF/World Bank spring meetings, including a G20 meeting (statement on Friday). There is no tension over the policy stance, with the EUR60bn monthly purchases of public sector bonds to continue. President Draghi will again have to walk a fine line between welcoming improvement in certain economic indicators e.g. PMIs and reiterating the commitment to pursuing QE to at least Sep 2016. He is likely to take questions on the possibility of reducing QE ahead of schedule but should point to the fact that inflation is still nowhere near the (“close to”) 2% target. Obviously there will also be questions on Greece but the key debate remains between politicians, not the ECB.
US Mar IP is likely to be soft again, -0.3%. There was a small bounce of 0.1% in Feb, but we have had weaker signals from ISM factory orders/production and auto orders, and will probably also have a pullback in utilities. US NAHB housing market index is seen to pick up from 53 in Mar to 55, after house sales picked up recently. The NY Fed’s Empire State manufacturing survey is forecast at 7.2, well below the readings of around 20 in mid-2014; Apr data however is often disappointing. We also have the Fed’s Beige Book of regional economic anecdotes. The Bank of Canada will decide on policy. Rates are expected to remain firmly on hold at 0.75% but the statement is always of interest.