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11 Apr 2013
Forex Flash: Chinese data adds to risk on sentiment - TD Securities
FXstreet.com (Barcelona) - TD Securities analysts note that overnight saw a decent risk-on session for Asia-Pac today, with equities higher across the board, commodity currencies outperforming and AUD 10yr bond yields opening 9bp higher (although rallied thereafter).
They add that yesterday’s strong Chinese imports outcome was a contributing factor and March new Yuan loans today were stronger than expected, adding to risk appetite. However, two events denting this enthusiasm were the Bank of Korea leaving the cash rate at 2.75% (mkt 2.5%) and Aussie employment crashed in March treading in the footsteps of the US and Canadian reports, pushing the unemployment rate up to 5.6% (a fraction of the G7 average nevertheless).
Further, headlines such as *N.KOREA MISSILE LAUNCHPAD MOVED TO FACE SKYWARD, KYODO SAYS keeps regional geopolitical risk on the radar, but, so far, the markets are glossing over such ‘news’. They add that NZD outperformed on Finance Minister headlines that house prices “will cause higher interest rates” then a few hours later house price inflation reached 2007 highs in March. They write, “We also note the headline *NEW ZEALAND REGISTERS TO SELL UP TO 100B YEN OF URIDASHI BONDS confirms that the BoJ printing press is once again fueling the traditional NZDJPY carry trade, speaking of 2007. At the time of writing NZD is back at $US0.86, the highest since Aug 11, overshooting our mid-year target of $US0.84.”
They add that yesterday’s strong Chinese imports outcome was a contributing factor and March new Yuan loans today were stronger than expected, adding to risk appetite. However, two events denting this enthusiasm were the Bank of Korea leaving the cash rate at 2.75% (mkt 2.5%) and Aussie employment crashed in March treading in the footsteps of the US and Canadian reports, pushing the unemployment rate up to 5.6% (a fraction of the G7 average nevertheless).
Further, headlines such as *N.KOREA MISSILE LAUNCHPAD MOVED TO FACE SKYWARD, KYODO SAYS keeps regional geopolitical risk on the radar, but, so far, the markets are glossing over such ‘news’. They add that NZD outperformed on Finance Minister headlines that house prices “will cause higher interest rates” then a few hours later house price inflation reached 2007 highs in March. They write, “We also note the headline *NEW ZEALAND REGISTERS TO SELL UP TO 100B YEN OF URIDASHI BONDS confirms that the BoJ printing press is once again fueling the traditional NZDJPY carry trade, speaking of 2007. At the time of writing NZD is back at $US0.86, the highest since Aug 11, overshooting our mid-year target of $US0.84.”