(QoQ) (YoY)
Consensus: 0.7% 2.9%
Previous: 0.7% 2.9%
Outlook:
Previous: Third quarter GDP for the
Reserve Bank of
Consensus: 7.25%
Previous: 7.25%
Outlook: The RBNZ monetary policy group is
expected to pass on a shift yet again at the conclusion of its two day-meeting.
What’s more, a growing number of market participants and economists are
expecting a new dovish tinge to show up in the comments that follow the actual
decision. Since the December meeting, a few indicators have weakened the case
for the possible rate hike RBNZ Governor Alan Bollard has talked warned of since
raising the overnight lending rate to its current record high. In the past
month, economic activity numbers have worsened. Looking at the whole picture,
growth in the third quarter slowed more than expected to a 0.3 percent clip. For
the year, that marks a reserved 1.4 percent pace, the worst performance from the
island nation’s economy in seven years. Honing in on a few of the more pertinent
sectors of the economy, the picture is blurred.
From the business group, third
quarter manufacturing activity slowed significantly on rising energy prices and
waning export demand. On the other hand, a recent read on fourth quarter
business confidence has shown significant improvement as optimists finally
outnumber the long-standing pessimists. Numbers from the consumer sector is more
conducive to an eventual rate cut. Spending has finally shown signs of slowing
after retail sales marked their first contraction in seven months in November.
At the same time though, consumer confidence has rallied to its highest level in
six years, suggesting consumers may end up controlling their own spending
habits. The single most influential indicator from the sea of data may be the
consumer price index. In the fourth quarter, the CPI read fell 0.2 percent for
the first contraction in nearly 6 years. In turn, the annual figure has fallen
within the central bank’s 1 to 3 percent target rate for the first time in 18
months.
Japanese Merchandise Trade Balance
(Yen) (DEC) (13:50 GMT; 18:50 EDT)
Consensus: 1,194.7 Billion
Previous: 911.3
Billion
Outlook: The Japanese Merchandise Trade
Balance likely moved to its highest in over two years, as a quickly falling
currency boosted the competitiveness of domestically produced goods. Indeed,
with the Yen at multi-year lows against a number of different major
counterparts, it is little wonder that exports would continue their strong pace.
Of equal significance, the falling purchasing power of the Yen only compounded
the effects of tepid consumer demand—leaving imports at a much slower rate of
growth. Though a strong trade balance figure undoubtedly bodes well for economic
growth, it will perhaps be more significant to review the political implications
of seemingly unflappable exports. A growing trade surplus will only increase
pressures on Japanese officials to allow for substantial appreciation of the
Yen—a seemingly essential condition for any worthwhile Yen retracement.
Previous: The Japanese merchandise trade
balance grew to its best since September, as strong international demand
underpinned domestic production. Exports grew an impressive 12.1 percent,
while imports gained a smaller 7.5 percent. The clearest support for overall
trade remained the Japanese currency, which has floundered to its lowest levels
since 1998 against a number of currencies. Moving forward, markets will watch
the overall trade balance growth to gauge the likelihood of a politically
motivated strengthening of the Yen.
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