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14 Apr 2015
Australia's NAB survey, MAS policy eyed - Westpac
FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, breaks down the key events to watch for during Tuesday, highlighting the NAB business survey in Australia and the MAS semi-annual policy review in Singapore.
Key Quotes
We will see the Mar NAB business survey in Australia at 11:30am Syd/9:30am Sing/HK. In Feb, conditions remained at 2 while confidence was below its long run average at 0. Broad based softness suggested that the fiscal environment was weighing.
Singapore’s event risk is unusually high as the MAS semi-annual policy review and advance Q1 GDP are due at 10am Syd/8am local. After the surprise easing on 28 January, markets are divided over whether there will be a follow-up move or a steady hand. We lean slightly towards a move of some sort, probably loosening policy slightly by re-centering the trade-weighted SGD policy band, or by widening the band. The latter option would probably mean SGD weakens given that it has recently been consistently in the lower half of the band. If the MAS holds steady entirely, USD/SGD should dip at least temporarily.
Singapore’s Q1 GDP should support an easy money stance, with the economy likely to be almost flat, perhaps growing marginally. Consensus is 0.2% q/q annualized (near enough to zero), 1.7% y/y. The government looks for better numbers as the year progresses, with a growth target of 2-4%. Almost all forecasters are expecting Bank Indonesia to remain on hold, keeping rates at 7.5%.
Eurozone Feb industrial production is expected to rise 0.4%, with German IP (ex construction) up 0.2% in Feb. The forecast for UK Mar CPI is for another flat headline reading. A downside surprise would generate a flurry of headlines, though core CPI is expected to remain at 1.2% y/y.
The highlight of the US calendar is Mar retail sales. Retailing in Feb was constrained by increased spending on non-retail services like home heating during the cold weather, and lower import prices also weighed on nominal sales. Mar should show some weather-related bounce, and gasoline prices have also levelled off. Headline is expected to bounce to 1.1%m/m after weak readings since Dec, while retail sales ex auto and gas should show a more modest rise of 0.6%. We will also see US Mar PPI, Feb business inventories and Mar NFIB small business optimism.
Key Quotes
We will see the Mar NAB business survey in Australia at 11:30am Syd/9:30am Sing/HK. In Feb, conditions remained at 2 while confidence was below its long run average at 0. Broad based softness suggested that the fiscal environment was weighing.
Singapore’s event risk is unusually high as the MAS semi-annual policy review and advance Q1 GDP are due at 10am Syd/8am local. After the surprise easing on 28 January, markets are divided over whether there will be a follow-up move or a steady hand. We lean slightly towards a move of some sort, probably loosening policy slightly by re-centering the trade-weighted SGD policy band, or by widening the band. The latter option would probably mean SGD weakens given that it has recently been consistently in the lower half of the band. If the MAS holds steady entirely, USD/SGD should dip at least temporarily.
Singapore’s Q1 GDP should support an easy money stance, with the economy likely to be almost flat, perhaps growing marginally. Consensus is 0.2% q/q annualized (near enough to zero), 1.7% y/y. The government looks for better numbers as the year progresses, with a growth target of 2-4%. Almost all forecasters are expecting Bank Indonesia to remain on hold, keeping rates at 7.5%.
Eurozone Feb industrial production is expected to rise 0.4%, with German IP (ex construction) up 0.2% in Feb. The forecast for UK Mar CPI is for another flat headline reading. A downside surprise would generate a flurry of headlines, though core CPI is expected to remain at 1.2% y/y.
The highlight of the US calendar is Mar retail sales. Retailing in Feb was constrained by increased spending on non-retail services like home heating during the cold weather, and lower import prices also weighed on nominal sales. Mar should show some weather-related bounce, and gasoline prices have also levelled off. Headline is expected to bounce to 1.1%m/m after weak readings since Dec, while retail sales ex auto and gas should show a more modest rise of 0.6%. We will also see US Mar PPI, Feb business inventories and Mar NFIB small business optimism.