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Japan Producer Prices Rise 0.2% In January





Producer prices in Japan were up 0.2 percent on month in January, the Bank of Japan said on Thursday.


That exceeded expectations for a flat reading following the 0.1 percent increase in December.


On a yearly basis, producer prices jumped 1.7 percent - again beating forecasts for 1.5 percent and up sharply from 0.9 percent in the previous month.


Export prices were up 0.3 percent on month and down 1.4 percent on year, the bank said, while import prices gained 0.7 percent on month and fell 0.7 percent on year.


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New Zealand Food Prices Rise 0.6% On Month In January





Food prices in New Zealand were up a seasonally adjusted 0.6 percent on month in January, Statistics New Zealand said on Friday.


Unadjusted, food prices gained 2.1 percent.


On a monthly basis, fruit and vegetable prices rose 3.7 percent (down 0.3 percent after seasonal adjustment); while meat, poultry, and fish prices rose 2.3 percent; grocery food prices rose 2.4 percent (up 1.3 percent after seasonal adjustment); non-alcoholic beverage prices rose 3.9 percent; and restaurant meals and ready-to-eat food prices rose 0.2 percent.


On a yearly basis, food prices were up 3.56 percent in January.


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Japan GDP Falls 6.3% On Year In Q4 Japan's gross domestic product was down an annualized 6.3 percent in the fourth quarter of 2019, the Cabinet Office said in Monday's preliminary report. That was well shy of expectations for a decline 3.8 percent following the 0.5 percent increase in the three months prior. On a seasonally adjusted quarterly basis, GDP sank 1.6 percent - again missing forecasts for a decline of 1.0 percent following the 0.1 percent gain in the third quarter. Nominal GDP was down 1.2 percent on quarter, missing expectations for a drop of 0.6 percent after gaining 0.6 percent in the previous three months. The GDP deflator was up 1.3 percent on year in Q4, the Cabinet Office said - exceeding expectations for an increase of 1.1 percent and up from 0.6 percent in the three months prior. Business spending skidded 3.7 percent on quarter, missing forecasts for a decline of 1.6 percent following the 0.5 percent increase in the third quarter. Private consumption sank 2.9 percent on quarter, missing forecasts for a drop of 2.0 percent following the 0.5 percent gain in the previous three months. News are provided by InstaForex.

EUR/USD: dollar continues to show strength, but its position does not look so unwaverable



Unlike its main competitor - the US dollar, which showed the best start since 2015, the euro seriously upset its fans. The greenback is favored by factors such as increased demand for defensive assets due to the coronavirus epidemic, strong statistics on the United States and more preferred (compared to peers) rates on the US debt market. The euro is being pulled to the bottom by unresolved issues on Brexit, the deterioration of the political landscape in the EU, disappointing macro statistics on the eurozone and the threat of a trade conflict between Washington and Brussels.

European GDP expanded by a modest 0.1% in the fourth quarter, while the German figure did not show growth at all. Experts recently interviewed by Reuters believe that by 2022, eurozone GDP will increase on average quarterly by 0.2-0.3, and by the end of 2019 it will accelerate by 0.9%. Given that the largest countries in the eurozone - France and Germany - receive about 40% of their income from foreign trade, there is reason to believe that in the near future the economy of the currency bloc may face even greater difficulties amid a slowdown in the growth of Chinese GDP associated with the epidemic coronavirus.

The successors to Angela Merkel as German Chancellor intend to fight for power in the country. The United Kingdom and the EU can not yet find common ground on a trade deal, which increases uncertainty and contributes to the outflow of capital from the EU. The ECB's ultra-soft monetary policy has made it unprofitable for both Europeans and banks to keep funds "at home" because of negative rates in the region.



Last weekend, the US trade mission reported that in March, Washington will increase the duty on aircraft imported from the EU from 10% to 15%. Apparently, these are just flowers. Over the past ten to twelve years, America has had a huge deficit in foreign trade with the EU. According to the head of the White House, Donald Trump, European duties on American goods are too high. Therefore, it is not surprising that the data on European trade balance published last Friday aroused the anger of the owner of the Oval Office. The trade surplus of the eurozone with the United States increased by 11% in 2019, to €152.6 billion. Obviously, after reaching a trade deal with Beijing, the White House intends to use all leverage to conclude an agreement with the EU.

The weakness of the eurozone economy, increased political risks in the region and concerns about a trade war between Washington and Brussels are forcing investors to get rid of the single European currency. The EUR/USD pair sank to its lowest level since April 2017.

Investment banks have already begun to actively reduce forecasts for the main currency pair. In particular, Credit Agricole analysts believe that at the end of 2020 EUR/USD will be trading near 1.13, and not at 1.16, as previously assumed. Danske Bank specialists went even further: they expect to see the euro fall in December not to $1.15, but to $1.08.

However, it should be recognized that the positions of the greenback do not look so unshakable. Data on US retail sales for November – December were revised downward, while industrial production in the country decreased for the fourth time in the last five months. This allowed Goldman Sachs and Barclays to lower forecasts for US GDP growth in the first quarter from 1.7% to 1.4% and from 1.5% to 1.1%, respectively. Therefore, one should not be surprised that the minutes of the January meetings of the Fed and the ECB will be used by speculators in order to take profit on shorts in EUR/USD. In this regard, the breakthrough of the bulls of resistance at 1.0870 will increase the likelihood of a pullback.

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Japan Data On Tap For Wednesday



Japan is scheduled to release December numbers for core machine orders and January trade data, highlighting a modest day for Asia-Pacific economic activity.

Machine orders are expected to fall 8.9 percent on month and 1.3 percent on year after jumping 18.0 percent on month and 5.3 percent on year in November.

Imports are tipped to fall 2.0 percent on year after sinking 4.9 percent in December. Exports are called lower by an annual 7.0 percent after sliding 6.3 percent in the previous month. The trade deficit is pegged at 1,684.8 billion yen following the 152.5 billion yen shortfall a month earlier.

Australia will see January results for the Westpac leading index and for skilled vacancies, as well as Q4 numbers for wage prices.

In December, the leading index added 0.1 percent on month and vacancies rose 0.6 percent on month. Wage prices are called steady at 0.5 percent on quarter and 2.2 percent on year.

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Australia January Unemployment Rate Rises To 5.3%



The jobless rate in Australia came in at a seasonally adjusted 5.3 percent in January, the Australian Bureau of Statistics said on Thursday.

That exceeded expectations for 5.2 percent and was up from 5.1 percent in December.

The Australian economy added 13.500 jobs last month to 12,995,400 people, again surpassing forecasts for a gain of 10,000 jobs following the gain of 28,900 jobs in the previous month.

Full-time employment increased by 46,200 to 8,882,200 people and part-time employment decreased by 32,700 to 4,113,300 people.

Unemployment increased by 31,000 to 725,900 people.

The participation rate was 66.1 percent, exceeding expectations for 66.0 percent - which would have been unchanged from the month prior.

Monthly hours worked in all jobs decreased by 8.1 million hours to 1,781.8 million hours.

The monthly seasonally adjusted underemployment rate increased by 0.3 pts to 8.6 percent. The monthly underutilization rate increased by 0.5 pts to 13.9 percent.

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Japan Inflation Data On Tap For Friday



Japan is on Friday scheduled to release January figures for consumer prices, headlining a busy day for Asia-Pacific economic activity.

Overall inflation is expected to gain 0.7 percent on year, slowing from 0.8 percent in December. Core CPI is tipped to gain an annual 0.8 percent, up from 0.7 percent in the previous month.

Japan also will see February readings for the manufacturing PMI from Jibun Bank and the services and composite PMIs from Nikkei. In January, the manufacturing PMI had a score of 48.8, while the services PMI was at 51.0 and the composite came in at 50.1.

Japan also will see December data for the all industry activity index, with forecasts suggesting an increase of 0.3 percent on month - slowing from 0.9 percent in the previous month.

Malaysia will see January figures for consumer prices; in December, inflation was up 0.2 percent on month and 1.0 percent on year.

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German Business Confidence Improves In February





Germany's business confidence improved in February, reports said citing survey data from the ifo institute on Monday.


The business climate index rose to 96.1 in February from 96.0 in the previous month. The score was above the forecast of 95.3.


The assessment of current situation weakened from last month, while expectations improved in February.


The current conditions index came in at 98.9 in February versus consensus of 98.6. At the same time, the expectations index rose to 93.4 compared to economists' forecast of 92.1.

Australia Construction Work Data Due On Wednesday



Australia will on Wednesday release Q4 numbers for construction work done, highlighting a light day for Asia-Pacific economic activity. Construction work is expected to fall 1.0 percent on quarter after losing 0.4 percent in the three months prior.

Japan will provide January figures for supermarket sales; in December, sales were down 3.3 percent on year.

Singapore will see January data for industrial production; in December, industrial production was up 4.1 percent on month and down 0.7 percent on year.

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New Zealand Trade Deficit NZ$340 Million In January



New Zealand posted a merchandise trade deficit of NZ$340 million in January, Statistics New Zealand said on Thursday.

That beat expectations for a shortfall of NZ$549 million following the NZ$547 million surplus in December.

Exports climbed an annual 8.8 percent or NZ$382 million in January to NZ$4.73 billion, exceeding forecasts for NZ$4.44 billion after coming in at NZ$5.54 billion a month earlier.

The leading contributor to the rise was exports of meat and edible offal, up NZ$187 million (31 percent) to NZ$800 million. Milk powder, butter, and cheese rose NZ$115 million (7.7 percent) to NZ$1.6 billion.

Exports to China were up NZ$302 million (31 percent) to NZ$1.3 billion, led by a rise in milk powder, butter, and cheese (up NZ$143 million); beef (up NZ$77 million); and logs, wood, and wood articles (up NZ$32 million).

Exports to the United States were up NZ$69 million (16 percent) to NZ$489 million. The rise was led by casein and caseinates (up NZ$23 million) and beef (up NZ$24 million).

Imports were down 4.0 percent on year or NZ$212 million to NZ$5.07 billion versus expectations for NZ$5.00 billion, which would have been roughly unchanged from the previous month.

This fall was led by vehicles, parts, and accessories, down NZ$116 million (17 percent) to NZ$591 million. Fertilizers also fell NZ$51 million (48 percent) to NZ$57 million.

On an annual basis, goods exports rose NZ$3.0 billion (5.2 percent) to NZ$60.3 billion, marking the first time it has reached NZ$60 billion. Goods imports rose NZ$400 million (0.6 percent) to NZ$64.2 billion. The annual trade balance was a deficit of NZ$3.9 billion.

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