Talking Points:
- Asian equities were mixed as weak Chinese exports deepened the clouds over markets
- The Nikkei managed to gain however, thanks to continuing USD/JPY weakness
- The Australian Dollar also rose, seeming to shrug off those Chinese numbers
Asian equity endured a nervous and rather mixed session on Friday, not helped by news of very feeble Chinese exports in December that capped a disappointing trading year.
The lack of policy detail from US President-elect Donald Trump when he met the press on Wednesday continues to unsettle markets, too. Comments from Federal Reserve Chair Janet Yellen crossed Asian wires during the session. She disappointed those looking for solid monetary guidance but at least evinced a degree of optimism, claiming to have no major short-term worries about the US economy.
China’s exports fell by a shocking 6.1% in US Dollar terms, compared to December 2015. For all of 2016 exports dropped by 7.7%, with imports down 5.5%. Chinese mainland stocks slipped, as did those in Hong Kong. Australia’s ASX 200 also fell, closing down 0.8% as financial stocks were hit by a wave of profit taking on recent gains.
In South Korea, the Kospi shed 0.5%. The Bank of Korea left its key interest rate on hold at a record low of 1.25%, as expected. Heavily weighted Samsung did a lot of the damage, falling 3% after Samsung Group leader Jay Lee was reported to have been detained by special prosecutors for 22 hours and questioned over bribery suspicions in a corruption scandal involving President Park Geun-hye.
Japan’s Nikkei 225 was perhaps the standout equity gainer, rising 0.7% thanks to the ever-reliable support of a weaker USD/JPY pair, with the greenback still on a weaker footing thanks to the unwind of some “Trump trade” optimism which has seen it climb since November. Still, USD/JPY was disinclined to visit Thursday’s lows in the high 113 area.
The Australian Dollar managed to continue its gains despite those woeful Chinese export data. Hopes for Chinese internal demand may be helping. Imports rose a little above consensus in December, climbing by 3.1% on-year.
Crude oil prices ticked up through the Asian session, rising 0.2%. Previously well-bid gold prices slipped back by a similar margin.
In terms of scheduled economic data, Friday’s US and European sessions don’t offer much, but what there is juicy and US-focused. We’ll get a look at advance US retail sales for the crucial month of December, along with the University of Michigan’s monthly consumer sentiment snapshot.
What’s your take on 2017’s first quarter in the markets? See how it lines up with DailyFX analysts’ forecasts here.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
