However, Aussie was pushed lower after China trade balance figures for November showed surplus of $ 54.47 billion, beating expectations on $43.95 billion surplus. But, exports for December were 4.7%, missing forecasts in 8% increase, while imports also missed predictions on 3.8% incline and fell by 6.7%, what is of course negative for Aussie as China is first Australian trading partner.
NAB Business Confidence figures were released on Tuesday from Australia. Latest NAB Business Confidence survey showed decline from previous month revised level of 5 to 1. This followed no change in October. Orders held up reasonably well, which reflects well on near-term demand. The fall in conditions was driven by all three components (sales, profits and employment), although the last remains the weakest, pointing to only very modest growth in employment –insufficient to prevent a further rise in the unemployment rate. But while last months spike was relatively broad based, the pull back in November was much more mixed across industries –concentrated in retail, manufacturing and service industries.
Wednesday brought Home Loans and Westpac Consumer Sentiment figure. While analysts were predicting 0.2% increase, latest release on Home Loans showed 0.3% raise in October on a seasonally adjusted basis. The total value of dwelling finance commitments excluding alterations and additions rose 1.0%.
Earlier on Wednesday morning the Westpac-Melbourne Institute Consumer Sentiment Index figures were released showing fall by 5.7% in December from 96.6 in November to 91.1 in December. The Index is now at its lowest level since August 2011 when it briefly fell below 90. Prior to that you have to go all the way back May 2009 to see a period when the Index printed consistently below today’s level.
From China CPI and PPI data was released. The consumer price index in China rose 1.4% from the year-ago period, what is the lowest reading since November 2009 and below expected increase by 1.6%. Month-on-month, prices fell 0.2%, missing forecasts on no change. Decline in inflation is mostly due to falls in global commodity prices which should, on balance, benefit most firms and households. What we can also expect is that price pressures are to moderate further going into next year.
Separate report on PPI also missed market predictions on decline by 2.3%. The producer price index fell for the 33rd straight months, down 2.7% on year in November. The wider fall in industrial commodity prices is likely to push year-on-year growth in producer prices even deeper into negative territory in the months ahead. However, falling PPI shouldn't be seen as a sign of distress in the industrial sector.
Focus of the morning part of the session on Thursday was on Australian job figures. Latest ABS report showed that Australian employment increased by 42,700 to 11,637,400 in November. Analysts were forecasting a smaller incline by 15,200. Full-time employment increased 1,800 to 8,059,400 and part-time employment increased 40,800 to 3,578,000. Unemployment increased 4,700 to 777,700. Unemployment rate increased by less than 0.1 points to 6.3%, in line with market expectations.
There were no data releases from Australia on Friday, however, morning part of the session was marked by Chinese Industrial Production figures. Industrial Production in China grew by 7.2%, missing market expectations on 7.6% growth, indicating a further slowdown in Chinese economy. Fixed Asset Investment data showed 15.8% increase in line with market forecasts while Retail Sales were up by 11.7%, beating predictions on 11.5% incline. Smaller growth in Industrial Production than expected was mostly factory shutdowns which caused a manufacturing slowdown.
This week markets will be looking at:
New Motor Vehicle Sales (Monday 1:30)
Mid-Year Economic and Fiscal Outlook (Monday 2:30)
HSBC Flash Manufacturing PMI (Tuesday 2:45)
