Talking Points
- More mixed action in Asia with Wall St. weighing on Japanese and Australian stocks
- Chinese names did better, possibly thanks to a huge surge in Chinese imports
- The US Dollar had a more torpid session
Wednesday provided yet another mixed session for Asian stocks, with the Nikkei slipping yet again, following a second day of Wall Street retreat.
The Nikkei shed 0.5%, with Australia’s ASX 200 also lower. However, mainland Chinese stocks and their counterparts in Hong Kong managed gains. China posted an extraordinary set of official February trade data. Contrary to expectations it chalked up a large deficit in yuan terms, the first since early 2014.
Somewhat unusually, the US Dollar terms had not been published fully at the time of writing (0630 GMT). However, behind that astonishing Yuan-terms headline was the perhaps even more astonishing detail that imports had risen more than 44% on the year. The data have probably been skewed by the timing of China’s long Lunar New Year celebrations, but even allowing for that demand looks pretty robust.
Other Asian data were scant. Japan’s Gross Domestic Product for the final quarter of 2016 was revised higher, but by less than the markets had expected. Business investment rose sharply, however. The country also posted its biggest trade gap for two years.
On the currency markets the US Dollar slipped a little against the Yen, while that China trade deficit put the Australian Dollar on the defensive. Crude oil prices slipped a little, probably on earlier news of another US inventory build. US benchmark prices fell far more than that of Brent. Gold prices meanwhile edged up but increasing market certainty that US interest rates will rise this month is keeping a lid on them.
The remainder of the global day offers investors a mixed menu of scheduled data. The UK will get sight of its Spring Budget, while out of the US will come the ADP employment report and wholesale inventory numbers.
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--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
