The Japanese Nikkei fluctuated between gains and losses as the week started and the GDP miss failed to provided a clear directio for the markets. Outside of Japan, sentiments were lifted by China's lending data. In the forex markets, dollar extended broad based weakness as last week's decline continued. Dollar index breached 80 handle briefly but is back above this level at the time of writing. Sterling remains the strongest currency on rate expectations. The New Zealand dollar is hit by weak retail sales data and is the second weakest currency so far, next to dollar. Yen is mixed despite the GDP miss.
Japan's economy grew for the fourth straight quarter in Q4 by 0.3% qoq. But, still missed expectations of 0.7% qoq. Meanwhile, the GDP deflator dropped -0.4% yoy, worse than the consensus of -0.2% yoy. The results raised questions over the sustainability of the supposed recovery momentum. And, it should be noted again that there is a planned sales tax hike to 8% in April, and the impact this will have on markets is still unclear.
Released from China over the weekend, new bank lending soared to CNY 1.32T in January, much stronger than expectation of CNY 1.1T. That was also nearly three times of December's level. That's also the largest surge since 2010. Other data released today saw New Zealand retail sales rose 1.2% qoq in Q4, versus consensus of 1.7% qoq. UK Rightmove house price rose 3.3% mom in February.
Looking ahead, the calendar is very light today with US on holiday. Nonetheless, the calendar is rather jam packed for the rest of the week. Here are some highlights:
- Tuesday: RBA minutes; BoJ rate decision; UK CPI; German ZEW; US Empire state manufacturing, TIC capital flow, NAHB housing market index
- Wednesday: UK job report, BoE minutes; Swiss ZEW; US new residential construction, PPI, FOMC minutes
- Thursday: New Zealand PPI; Japan trade balance; China PMI manufacturing; Eurozone PMIs; US CPI, Philly Fed survey
- Friday: BoJ minutes; UK retail sales; Canada CPI, retail sales; US existing home sales