Also, from China, Trade Balance data was published. Chinese trade data produced another horror show in February with steep declines registered in both imports and exports for the month. Imports slid by 13.8%, again below forecasts for a drop of 10.0%. Despite the continued decline, it was an improvement on the 18.8% drop registered previously. As a consequence of the movements in exports and imports, the trade surplus came in at US$32.59 billion, significantly below forecasts for a smaller narrowing to US$50.15 billion.

 

Wednesday was marked by Home Loans and Westpac Consumer Sentiment figures. Australian Home Loans fell by 3.9% in February, thus missing forecasts on 2.7% decrease. The trend estimate for the total value of dwelling finance commitments excluding alterations and additions fell 0.6%. Owner occupied housing commitments fell 0.1% and investment housing commitments fell 1.6%. In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions fell 3.4%.

 

Separate report for Westpac Melbourne Institute Index of Consumer Sentiment showed that it fell by 2.2% in March from 101.3 in February to 99.1 in March. The Index is back to around its average reading over the last six months. Following the change of leadership of the Federal Government in September the Index lifted by 8.3% over the subsequent two months. It has broadly held those gains with today’s reading off that high in November by 2.5% although we are now slightly back in the region where pessimists outnumber optimists.

 

There were no major data releases from Australia on Thursday, but from China CPI and PPI data was published. China’s consumer price rose the most since mid-2014 in February as food costs jumped amid the week-long Lunar New Year holidays, where millions binge on roast pork, duck, seafood and vegetables. The consumer-price index rose 2.3 percent in February from a year earlier, up from 1.8 percent in January, as food prices surged 7.3 percent. Raising question marks over the durability of that pickup, non-food prices moderated from a month earlier to a 1 percent increase and services inflation slowed.

 

The producer-price index fell 4.9 percent, narrowing from a 5.3 percent decrease in January, extending declines to a record 48 months. Stabilization in prices, if sustained in coming months, will ease policy makers’ concerns over deflation, which discourages new investment and erodes profit margins. Still, CPI remains well below the government’s target for 3 percent this year, meaning there’s no constraint yet on policy makers’ scope for easier monetary settings.

 

This week markets will be looking at:

 

Monetary Policy Meeting Minutes (Monday 1:30)

Employment Change/Unemployment Rate (Thursday 1:30)