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Australia Unemployment Rate Unchanged At 5.0% In January



The jobless rate in Australia was a seasonally adjusted 5.0 percent in January, the Australian Bureau of Statistics said on Thursday - unchanged and in line with expectations.

The Australian economy added 31,900 jobs last month - blowing away forecasts for an increase of 15,000 jobs following the gain of 16,900 jobs in December.

Full-time employed persons increased 65,400 to 8,743,100 and part-time employed persons decreased 26,300 to 4,008,700.
Unemployed persons increased 6,600 to 673,500.

The seasonally adjusted underemployment rate fell 0.2 pts to 8.1 percent, while the monthly underutilization rate fell 0.1 pts to 13.2 percent.
The participation rate was 65.7 percent, exceeding expectations for 65.6 percent - which would have been unchanged from the previous month.
Monthly hours worked in all jobs increased 6.6 million hours to 1766.4 million hours.

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Euro Mixed Ahead Of German GDP Data



At 2:00 am ET Friday, Destatis will release German final GDP data for the fourth quarter. Ahead of the data, the euro traded mixed against its major counterparts. While the euro rose against the greenback and the yen, it held steady against the franc and the pound.
The euro was worth 125.64 against the yen, 1.1351 against the franc, 0.8698 against the pound and 1.1341 against the greenback as of 1:55 am ET.

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EUR / USD: Greenback's remarkable resilience and euro's ghostly hopes for growth



Against the backdrop of expectations on the possible occurrence of a three -year cycle tightening the monetary policy of the US Federal Reserve System (Fed) and its nearing completion, traders began to rely on the weakening of the US currency by the end of last year. However, after the decline in December-January, the greenback was able to get managed in February not only to restore the lost positions, but also to strengthen by almost 1%.

This year, the stability of the dollar came as a surprise to many. However, it is hardly surprising, given the fact that the same factors that limit the Fed in actions (slowing global growth and tightening financial conditions), force other central banks to take a more cautious position, "BlackRock representatives said.

"It is possible that in the future the market will have to adapt not only to mitigate the Fed's policy, but also to show a more" dovish "attitude of the ECB. It is assumed that in the coming months, the difference in interest rates in Europe and the United States will play in favor of the greenback, "noted JP Morgan Asset Management experts.

"Despite the easing of the Fed's rhetoric, the single European currency finally lost its appeal, as well as, the support of those drivers who provided the upward momentum of EUR / USD in 2016-2018. We expect a shift in trade from the range of 1.12-1.15 to 1.10-1.14, "analysts at Barclays said.

"The euro against the dollar stuck in the area of 1.12-1.16. We believe that cyclical factors will support the demand for the American currency in the near future, "said strategists at Danske Bank.

According to the experts, in the event of a settlement of trade disputes between Washington and Beijing, it will be possible to count on accelerating US economic growth, which is why the Fed will return to a tighter monetary policy to support the greenback.

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The dollar could be preparing for a new rally



Following the active growth observed in mid-February, the US currency came under pressure against the background of a softening of the Fed's rhetoric and positive expectations about making progress in the United States and China trade negotiations.

Does this mean that the strengthening of the greenback, which began in February last year, is nearing completion?

Investors expect the Federal Reserve to refrain from hiking interest rates in the current year, and are inclined to believe that the next step for the regulator may be to reduce the cost of borrowing, at least this is indicated by the futures quotations for the federal financing rate.

Meanwhile, the minutes of the last meeting of the US central bank show that it may not be such a "dove" as the markets believe. In any case, the prevailing views among FOMC members proceed from the fact that the regulator may have not yet completed the rate hiking process, but simply paused it.

In particular, the head of the Federal Reserve Bank of Atlanta, Raphael Bostic, believes that the Fed may raise the federal funds rate by 0.25% this year and by the same amount next year.

As for the trade negotiations between Washington and Beijing, the transaction may not take place at all, which will be one of the drivers for strengthening the greenback.

Here we should also add America's trade war against Europe, as well as the growing US public debt. In addition, one should not forget about the securities market, which may be on the "bearish" territory after the longest "bullish" cycle in history, which will again push global investors to US government bonds and the dollar.

Thus, based on the above, most likely, we should expect the next USD rally, within which the highest levels of November-February (around the mark of 97.50) will be tested.

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China Manufacturing PMI Slides To 49.2 In February



The manufacturing sector in China continued to contract in February, and at a faster rate, the latest survey from the National Bureau of Statistics revealed on Thursday with a manufacturing PMI score of 49.2.

That missed expectations for a score of 49.5, which would have been unchanged from the previous month. It also moves further beneath the boom-or-bust line of 50 that separates expansion from contraction.

The bureau also said that its non-manufacturing PMI came in with a score of 54.3 in February - again shy of expectations for 54.5 and down from 54.7 in the previous month.

The composite index posted a score of 52.4, down from 53.2 a month earlier.

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Philippines Manufacturing Sector Slows In February - Nikkei



The manufacturing sector in the Philippines continued to expand in February, albeit at a slower rate, the latest survey from Nikkei revealed on Friday with a manufacturing PMI score of 51.9.

That's down from 52.3 in January, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

Individually, new order growth was at its weakest in seven months but export orders rose for the first time since August.

Output and employment both increased at manufacturers, although stocks of finished goods fell for the first time in eight months during February.

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Australia January Building Approvals Advance 2.5%



The total number of building approvals consented in Australia climbed a seasonally adjusted 2.5 percent on month in January, the Australian Bureau of Statistics said on Monday - standing at 14,395.
That exceeded expectations for a gain of 1.5 percent following the 8.4 percent slide in December.
On a yearly basis, approvals plummeted 28.6 percent - which actually beat forecasts for a fall of 28.9 percent following the 22.5 percent drop in the previous month.

The number of consents issued for private sector houses was up 2.1 percent on month and down 6.6 percent on year at 9,423. The number of private sector dwellings excluding houses was up 2.7 percent on month and down 51.0 percent on year at 4,800.

The seasonally adjusted estimate of the value of total building approved rose 1.3 percent in January. The value of residential building fell 2.0 percent, while the value of non-residential building rose 6.4 percent.
Also on Monday, the ABS said that company operating profits in Australia were up a seasonally adjusted 0.8 percent on quarter in the fourth quarter of 2018.

That was well shy of expectations for a gain of 3.0 percent following the 1.9 percent increase in the three months prior. They were up 10.5 percent on year. Inventories fell 0.2 percent on quarter, missing forecasts for a gain of 0.3 percent following the 0.1 percent drop in Q3. They were up 1.0 percent on year. Wages and salaries were up 0.8 percent on quarter and 4.1 percent on year.

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Australia Has A$7.2 Billion Current Account Deficit In Q4



Australia had a seasonally adjusted current account deficit of A$7.2 billion in the fourth quarter of 2018, the Australian Bureau of Statistics said on Tuesday.

That exceeded expectations for a shortfall of A$9.1 billion following the A$10.7 billion deficit in the three months prior.

The surplus on goods and services fell A$781 million from A$2.022 billion in the third quarter to A$1.241 billion in the fourth quarter.

Net exports of gross domestic product fell 0.2 percent versus expectations for a fall of 0.1 percent following the 0.4 percent gain in Q3.

Australia's net IIP liability position was A$975.7 billion at 31 December 2018, an increase of A$36.5 billion on the revised 30 September 2018 position of A$939.1 billion.

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Australia Q4 GDP Advances 0.2% On Quarter



Australia's gross domestic product added a seasonally adjusted 0.2 percent on quarter in the fourth quarter of 2018, the Australian Bureau of Statistics said on Wednesday.

That was shy of expectations for an increase of 0.5 percent following the 0.3 percent gain in the three months prior.

On an annualized basis, GSP was up 2.3 percent - again missing forecasts for 2.6 percent and down from 2.8 percent in the previous quarter.
"Growth in the economy was subdued, reflecting soft household spending and a decline in dwelling investment," ABS Chief Economist Bruce Hockman said. "The approvals for dwelling construction indicate that the decline in dwelling investment will continue."

Household spending grew 0.4 percent, reflecting a continuation of modest spending in recent quarters. Investment in dwellings fell 3.4 percent.
Falls in private investment dampened growth in the quarter. This was consistent with the decline in construction industry value added, falling 1.9 percent. Services industries supporting construction activity detracted from growth with professional scientific and technical services industry value added declining for the first time in three years.

Mining investment fell in the quarter as significant projects transitioned from the construction to the production phase. This is reflected in oil and gas production, which grew 7.7 percent.

Public demand sustained growth in the quarter. Public investment remained at high levels with State and Local government growth of 6.3 per cent reflecting continued work on a number of large infrastructure projects.

Government final consumption expenditure grew 1.8 percent, with ongoing expenditure in health, aged care and disability services. This investment translates to ongoing strength from the healthcare industry, which remains the largest contributor to economic growth.
Terms of trade rose 3.1 percent.

"As the economy transitions out of the mining boom, investment has remained strong with major public works driving growth around Australia," Hockman said.

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Australia January Trade Surplus A$4.549 Billion



Australia posted a seasonally adjusted merchandise trade surplus of A$4.549 billion in January, the Australian Bureau of Statistics said on Thursday.

That exceeded expectations for a surplus of A$2.90 billion and was up A$780 million from the upwardly revised A$3.769 billion surplus in December (originally A$3.681 billion).

Exports were up 5.0 percent on month or A$1.901 billion to A$39.937 billion in January from A$38.036 billion in the previous month.
Non-monetary gold rose A$1.373 billion, while non-rural goods rose A$396 million (2 percent) and rural goods rose A$97 million (2 percent).
Net exports of goods under merchanting fell A$12 million (33 percent) and services credits rose A$46 million (1 percent).

Imports picked up 3.0 percent or A$1.121 billion to A$35.388 billion from A$34.267 billion a month earlier.

Capital goods rose A$737 million (12 percent), while consumption goods rose A$483 million (6 percent) and intermediate and other merchandise goods rose A$157 million (1 percent).

Non-monetary gold fell $65 million (13 percent) and services debits fell A$191 million (2 percent).
Also on Thursday: .

The ABS said that the total value of retail sales in Australia was up a seasonally adjusted 0.1 percent on month in January, coming in at A$27.018 billion. That was shy of expectations for a gain of 0.3 percent following the 0.4 percent decline in December.

Individually, there were gains in food retailing (0.3 percent), cafes, restaurants and takeaway food services (0.2 percent), and clothing, footwear and personal accessories retailing (0.1 percent). Other retailing (0.0 percent) was relatively unchanged, while household goods retailing (-0.2 percent), and department stores (-0.4 percent) fell in January. .

The construction sector in Australia continued to contract in February, albeit at a slower pace, the latest survey from the Australian Industry Group revealed on Thursday with a Performance of Construction Index score of 43.8.

That's up from 43.1 in January, although it remains well beneath the boom-or-bust line of 50 that separates expansion from contraction.
In all, the sector has been in contraction for six straight months.

Individually, activity, employment, new orders, supplier deliveries and selling prices were all firmly in contraction. Input prices and average wages continued to expand, although at a slower rate.

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ECB maintains super-soft monetary policy



The European Central Bank (ECB) has postponed the interest rate hike for an indefinite period, which means that the slowdown in economic growth in the eurozone has surpassed the calculations of experts.

According to the ECB, the interest rate will remain unchanged until the end of 2019, the previous forecast assumed it would maintain the current rate until September 2019. Since March 2016, the ECB's key refinancing rate is zero.

The ECB's previous forecast assumed an interest rate increase at any time from September 2019. However, after the publication of the economic indicators of Germany and Italy for the fourth quarter of 2018 and weak results at the beginning of the current year, tightening monetary policy seems to be a premature measure.

The problem is that the ECB Chairman Mario Draghi is trying to complete the program of ultra-soft monetary policy, which for the last ten years has supported the project of the single European currency. On the other hand, the European regulator needs to take measures to resume the region's slowing economic growth.

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Japan M2 Money Stock Climbs 2.4% On Year In February



The M2 money stock in Japan was up 2.4 percent on year in February, the Bank of Japan said on Monday - coming in at 1,010.1 trillion yen.
That was in line with expectations and up from the downwardly revised 2.3 percent in January (originally 2.4 percent).
The M3 money stock was up an annual 2.1 percent for the fourth straight month, matching expectations at 1,343.1 trillion yen.
The L money stock was up 2.1 percent on year at 1,789.5 trillion yen, accelerating from the 1.9 percent gain in the previous month.

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What is waiting for the dollar this week, and what data should be considered carefully



This week, the dollar started, almost came close to a three-month high, as investors continued to give preference to the greenback amid fears of global growth. The dollar index against a basket of six major currencies grew by 0.1 percent, to 97.412 points, just this year the figure rose 1.3 percent. There is no good news for the euro. Last week, the euro currency fell to its weakest level since June 2017, after officials at the European Central Bank changed their hawkish tone to dovish. After the bank significantly reduced its forecast for growth in the eurozone, and also because of weaker-than-expected Chinese export and import data, concerns about the weakness of the global economy are resuming. This instantly puts pressure on the euro and other currencies, except the dollar, which is relatively strong as long as the US economy maintains its pace.

However, there are also alarming signals: employment growth almost stopped in February, as the world's largest economy created only 20,000 jobs, which is much less than what analysts expected. But traders also found positive news, the employment rate in the US fell below 4 percent, and the average hourly wage increased by 0.4 percent, which will help reduce the dollar's loss.

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Japan January Core Machine Orders Plunge 5.4%



The total value of core machine orders in Japan dropped a seasonally adjusted 5.4 percent in January, the Cabinet Office said on Wednesday - coming in at 822.3 billion yen.

That missed expectations for a decline of 1.5 percent following the downwardly revised 0.3 percent fall in December (originally -0.1 percent).

On a yearly basis, core machine orders sank 2.9 percent - again shy of expectations for a fall of 2.1 percent following the 0.9 percent gain in the previous month.

Manufacturing orders fell 1.9 percent on month and 7.5 percent on year, while non-manufacturing orders tumbled 8.0 percent on month and added 1.0 percent on year.

Government orders rose 2.7 percent on month and 6.2 percent on year, while orders from overseas plummeted 18.1 percent on month and 22.7 percent on year and orders through agencies fell 1.3 percent on month and gained 6.5 percent on year.

The total value of machinery orders received by 280 manufacturers operating in Japan tumbled 7.9 percent on month.

Also on Wednesday, the Bank of Japan said that producer prices in Japan were up 0.2 percent on month in February. That exceeded expectations for an increase of 0.1 percent following the 0.6 percent decline in January.

On a yearly basis, producer prices climbed 0.8 percent - again exceeding expectations for a gain of 0.7 percent and up from 0.6 percent in the previous month.

Export prices were up 0.6 percent on month and down 1.7 percent on year in February, the bank said, while import prices gained 1.1 percent on month and fell 0.7 percent on year.

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When is May's resignation and what is the Bank of England's opinion?



The pound continues to be the most dynamic asset of the foreign exchange market. Moreover, now traders are preparing for the growth of currency fluctuations before the next stages of Brexit. So, it is unlikely that anyone expected the British MPs to support Theresa May's deal on Tuesday. Today, few expect that the Parliament will decide to leave the European Union without a deal. The third round of voting is still on Thursday. The question of whether to extend Article 50 will be considered, and it seems very likely that there is no alternative to this solution.
It is peculiar what the MPs expect after postponing the deadline for the exit. European officials have clearly expressed their position: there will be no more concessions - neither on the Irish back-stop, nor on any other issues. Many hope that, faced with such a defeat, England will reject the idea of withdrawing from the union or hold a repeated referendum.

By the way, Theresa May even created the prerequisites for this. Here's how she commented on the disastrous vote on Tuesday:
"The European Union will want to know why we want to postpone the deadline. The House will have to answer this question: do we want to suspend the operation of Article 50, to hold a second referendum, or to conclude a deal different from the current one".
Despite May's next fiasco, ther sterling was able to stay afloat and did not sink to the bottom. After a short fall, it remained above $1.30. It seems that market participants expect to get more time, even if it has to prepare an exit without a deal.

However, the question regarding the British prime minister's ability to provide for the country's exit conditions, under which it will retain access to the single European market and customs union, is again a big question. Therefore, in the coming days, the general political uncertainty may be aggravated by the possibility, but real, resignation of Theresa May. In this regard, investors will look to selling the GBPUSD pair.
Bank of England Position
The Bank of England ordered financial companies to accumulate excess liquidity and launched a mechanism for mutual exchange of currencies to provide access to foreign currency if the need arises. A very prudent step, and precisely for this reason, members of a committee of the Bank of England made it clear that they could vote for lower rates if the country exited the EU without a deal. Thus, they intend to give the economy an opportunity to cope with the crisis.
The official position of the central bank is that the rates can not only decrease, but also rise with the rigid performance of Brexit. However, a more likely scenario, according to Mark Carney, would be a decline. He also warned that a "hard divorce" with the EU would have a strong inflationary impact due to the potential collapse of the sterling.
Artificial Intelligence Opinion
Investors are now hoping and betting quotes for the pound, a scenario of prolongation of Article 50 of the Lisbon Treaty, while they underestimate the risk of a "hard" Brexit. According to forecasts of a hedge fund created by former JPMorgan traders and using artificial intelligence, the pound is waiting for a deep fall due to an exit without a deal. According to the base scenario of traders, the sterling will first collapse and then begin to recover.
Britain will withdraw from the EU without a "default" deal, since "neither side will be able to agree on something," the fund representatives wrote.
"The longer the government postpones its decision, the more hope for the possibility of holding another referendum will increase among market players, reinforcing the view that Brexit can be canceled," the forecast also says.

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Australia House Price Index Sinks 2.4% In Q4



House prices in Australia were down 2.4 percent on quarter in the fourth quarter of 2018, the Australian Bureau of Statistics said on Tuesday - coming in at A$6.677 trillion.

That missed expectations for a fall of 2.0 percent following the 1.5 percent decline in the three months prior.

The capital city residential property price indexes fell in Sydney (-3.7 percent), Melbourne (-2.4 percent), Brisbane (-1.1 percent), Perth (-1.0 percent), Canberra (-0.2 percent) and Darwin (-0.6 percent) and rose in Hobart (+0.7 percent) and Adelaide (+0.1 percent) on a quarterly basis.

On a yearly basis, house prices sank 5.1 percent - again missing forecasts for a drop of 5.0 percent following the 1.9 percent contraction in the previous three months.

Annually, residential property prices fell in Sydney (-7.8 percent), Melbourne (-6.4 percent), Darwin (-3.5 percent), Perth (-2.5 percent) and Brisbane (-0.3 percent) and rose in Hobart (+9.6 percent), Canberra (+1.8 percent) and Adelaide (+1.5 percent).

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Euro Mixed Ahead Of German PPI



Destatis will release German producer prices for February at 3:00 am ET Wednesday.

Ahead of the data, the euro traded mixed against its major counterparts. While the euro held steady against the greenback and the yen, it rose against the pound. Against the franc, it fell.

The euro was worth 126.61 against the yen, 1.1342 against the franc, 0.8560 against the pound and 1.1347 against the greenback as of 2:55 am ET.

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Australia Jobless Rate Sinks To 4.9% In February



The unemployment rate in Australia came in at a seasonally adjusted 4.9 percent in February, the Australian Bureau of Statistics said on Thursday - beneath expectations for 5.0 percent, which would have been unchanged from the January reading.

The Australian economy added 4,600 jobs in February, shy of forecasts for the addition of 15,000 jobs following the gain of 38,300 jobs in the previous month.

The participation rate was 65.6 percent, below expectations for 65.7 - which would have been unchanged from a month prior.

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Japan Manufacturing PMI Unchanged At 48.9 In March - Nikkei



The manufacturing sector in Japan continued to contract at a steady pace, the latest survey from Nikkei revealed on Friday with a manufacturing PMI score of 48.9.

That's unchanged from the February reading and it remains beneath the boom-or-bust line of 50 that separates expansion from contraction.
Individually, there were further production cutbacks amid weaker new order inflows, while business confidence remained below the long-term average.

"Further struggles for Japanese manufacturers were apparent at the end of Q1, with latest flash PMI data showing a sustained downturn. Slack demand from domestic and international markets prompted the sharpest cutback in output volumes for almost three years," said IHS Economist Joe Hayes.

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The yen got wings, next stop $ 108.5



The fall of the yield curve below zero for the first time since 2007 stirred up the financial markets. The indicator, showing the difference between 10 and 3-year treasuries, is a reliable harbinger of a recession with a time lag of 12-18 months. Its inversion pushed players to active sales of shares. The losses of the S & P 500 amounted to 1.5%, and two new topics appeared on the market, fueling traders' interest in protective assets, such as the yen.

The sharp change in the rate of the Federal Reserve at the beginning of the year contributed to the rapid rally of US stock indices. The stock market prepared to close the quarter with the best result in nearly 30 years. However, it looks unnatural when macroeconomic statistics deteriorate and stocks rise. The growth of the US economy in the first quarter, will slowdown to less than 1% according to estimates of the leading indicator from the Atlanta Fed. hus, Morgan Stanley suspects that October-December GDP may be adjusted from 2.6% to 1.8% in quarterly terms. Divergence between economic reports and stock indicators cannot last forever.

The situation is similar throughout the world. Thus, the index of purchasing managers in the manufacturing sector of China, Japan, and the eurozone is below the critical level - 50, which indicates a slowdown in global GDP growth. Meanwhile, European stocks are ahead of their American counterparts, and the global MSCI is increasing. The naked eye can see that the market is overheated, which means it's time to pay attention to the safe haven assets. A 1.5% increase in the Japanese yen last week is a further evidence of this.

The national currency of Japan was under the "press" for quite some time. Its growth was hindered by such factors as high risk appetite, low rates of the world debt market and volatility. Inversion of the US yield curve provoked carry-traders to close positions, increased demand for funding currencies, and also caused the USDJPY rate to depreciate.

Among the most obvious fears of the market is the excessively "soft" position of the Fed. There was a too sharp change of tone. In December, the regulator allowed three series of rate increases, and now it does not plan any policy tightening. Perhaps, officials of the regulator do not agree on something, for example, a speedy recession. That is why the yield curve and went into the red zone.
Safe haven assets, as well as the yen, will be supported by the growing risks of the subsequent correction of the S & P 500 and increased volatility. The situation is heightened by rumors about Theresa May's resignation and the possible escalation of trade conflicts. Thus, the USDJPY pair may well move to the level of $ 108.5.

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