Australia’s Trade Surplus

Once again key data is set to be release from Asia and the main focus will be Japan and Australia. Japan’s Gross domestic product for the first quarter is due alongside the RBA minutes for the surprise decision that saw 50 bps rate cut. The start will be on May 14 with the Reserve Bank of Australia minutes. The rapid developments in the Australian economy grabbed investors attention during the past period especially after the budget surplus that made the nation’s economy stronger and well prepared to resist any further global growth deceleration, also gave the chance to the RBA to act more freely with monetary policies. Australia’s trade balance deficit widened in March more than expected to A$1587 million pressured by weaker mining production, and the mining boom has been the major ...

Last week saw the release of important Asian data that should be taken in consideration, especially amid the global tension over Europe’s sovereign debt crisis that hindered many economies. Australia, China and Japan released critical data that might be influential on policy decisions in the coming period. The first two days of the week were focused on the Australian economy the start was with business conditions and confidence that slowed in April, as well as retail sales that rebounded and recorded a rise in March easing some of the tension. Seasonally adjusted sales increased 0.9% from previous of 0.2%. At the same time the retail sales excluding inflation recorded 1.8% rise from previous of 0.4% in first quarter. Moreover, Australia recorded a widened trade balance in March, the ...

Attention was momentarily drawn away from Europe by employment data out of Australia and then trade figures out of China, with the former printing better than expected and the latter disappointing the market. Following the data, price action was fairly range bound in the FX market as investors await the slew of news and data out of the UK and US tonight. In Australia, data released early in the session showed that the unemployment rate dropped to 4.9% from 5.2% and employment increased by 15.5K, much better than the expected increase in the unemployment rate to 5.3% and a drop in employment of 5K. The participation rate also cooled at little, coming in at 65.2% versus a prior 65.4%. Overall, the employment data bodes well for the health of the Australian economy this year. We were ...

Announcements of central banks’ Governors and instability in political side in Greece participated on today’s drop for major currencies, leaving the power to American dollar from the beginning of today’s session, where Greek politicians failed to maintain a government which made the Euro hits the lowest in more than three months against dollar. From another side, Julia Gillard, Australia’s prime minister said that current budget surplus gives the chance to central bank to move on interest rate in order to ease the strong Australian dollar, where stronger Australian dollar may hinder manufacturing and tourism revenues. Furthermore, Australian dollar fell to four months low against dollar, to reach 1.0058 from 1.0098 with high of 1.0115 and now at 1.0059. NZD/USD pair fell for the second ...

Australia and its monetary policy makers sees that surplus in budget is the way to face the instability of global economy and its recovery and also the way to get over the Europe’s debt crisis. Meanwhile, the previous decline in interest rate by 50 basis point by the Bank of Australia to be 3.75% reflect the bank’s worries over the instability of global economy, where the move supported the nation’s growth and credit section, while Australia’s economy is expected to regain better growth rates during the upcoming year depending mainly on mining sector. Australian government is trying to find out new plans and alternative solutions amid the declining in its popularity, where the government intends to offer a new plan to support Australian budget. Consumer Confidence fell in April to the ...

Fundamental Analysis EUR European economy declined in the 4th quarter of 2011 as investment fell most since 2009 amid dropping consumer spending and exports. GDP both in Euro Zone and EU 27 area fell 0.3% compared to 3rd quarter said EU statistics office on Tuesday. Exports contracted 0.4% compared to a 1.4% gain in the 3rd quarter. Investment faded 0.7% and household spending diminished 0.4%. USD Several US leading banks attempt to persuade Fed to restrict the amount of information it discloses to public when it reports the outcome of recent stress tests. Federal Reserve is preparing to disclose more details than it did in 2009. The Clearing House Association said in a letter to Fed that unveiling extra information may have a negative effect on financial institutions involved in ...

Fundamental Analysis EUR 17-nation currency appreciated against the Greenback and the Japanese Yen after European Finance Ministers approved the second rescue package for indebted Greece. Euro added 0.1% against its US peer to USD 1.3254 and strengthened 0.2% against Yen to JPY 105.62. USD Home improvement retailer Home Depot reported its profit jumped 32% in fourth quarter, mainly due to higher net sales which climbed 5.9%. Sales at identical stores added 5.7% reported Home Depot on Tuesday. In total company earned USD 774 million or USD 0.5 per share. The profit outperformed analyst estimations of profit USD 0.42 a share. GBP UK's public sector net borrowing fell much more than initially projected in January, reported the UK National Statistics Office. The indicator swung to surplus ...

The Asian region witnessed a week full of economic data, where major economies released economic data that help in predicting the course for 2012 in light of the European debt crisis, which controls the course of events so far. The surprise for the week was mainly the RBA as the Reserve Bank of Australia unexpectedly kept its benchmark interest rate steady at 4.25% opposed to the widely expected 25 bp cut, as it said that inflation rates will remain within the targeted levels during the next two years. Analysts predicted a 54% chance that the RBA governor will cut the interest rate again as Australia’s job market weakens, yet it wasn’t expected that the RBA's Governor Glenn Stevens will avoid another cut after taking rated down to 4.50% from 4.75% on November 1, which was the first ...

The Asian region witnessed a number of economic data where the Chinese data helped in supporting markets with better than expected manufacturing expansion. The data helped further in clearing the uncertainty yet still we can see that Asian economies are suffering the sluggish global growth and the downside pressure of the debt crisis. The Japanese industrial production rose more than analysts forecasted in December, where the manufacturers bolstered production to make up for disruptions caused by Thailand’s worst floods in 70 years. Industrial production rose 4.0% according to the preliminary December estimate that followed a drop of 2.7% the previous month and opposed expectations of -3.0%. Japanese manufacturers from Honda to Toyota Motor are very optimistic about global and domestic ...