ForexLive Asia-Pacific FX news wrap: China’s NBS February PMIs leap higher

National Bureau of Statistics PMIs showed a huge jump for
manufacturing (52.6 in February, its highest since April 2012, from
50.1 in January) and non-manufacturing (56.3 from 54.4) today. Hong
Kong stocks have surged, the Hang Seng is up around 3%, while on
mainland China the Shanghai Composite is up around 0.8%. An
underpinning of equity markets, by whatever it takes really, was
expected with the national parliament opening this coming weekend:

to the Chinese data we had Q4 GDP and January month inflation data
from Australia. In a nutshell, GDP missed its central estimate, while
the monthly CPI dropped to 7.4% from 8.4% in December. The figures
were suggestive that inflation has peaked in Australia. RBA rate
hike expectations ahead, and the Australian dollar, were both marked
down. AUD/USD dropped briefly under 0.6700.

came back to bite, though. The monthly CPI is only a (very) imperfect
guide to what the official quarterly CPI might be. As I have posted
previously, monthly
inflation data from Australia is a proxy for the more thorough
quarterly figure:

  • it
    provides a more timely view on inflation
  • but
    it is an incomplete update, only an approximation
  • it
    covers around 60% of price updates, and today’s
    January data only
    applies to the first month of the quarter (d’uh)
  • analysts
    especially poor coverage of market services components of the
    inflation basket this month

7.4% is more than two times higher than the upper limit of the RBA’s
target band, 2 to 3%, for inflation.

soon surged back higher, making a fresh high for the session above
0.6745. Its around there as I post.

rose in a fairly steady fashion, adding on 60 or so points from its
US Tuesday afternoon lows. Junko Nakagawa, policy board member at the Bank of Japan spoke during the session. She did not give any indication of being in favour of any near-term policy change away from loose policy.

the USD has fallen against other major FX. CAD, NZD, EUR, CHF are all
a little higher on the day. GBP is line ball unchanged.

equity markets:

  • Japan’s
    Nikkei 225 +0.16%

  • China’s
    Shanghai Composite +0.9%

  • Hong
    Kong’s Hang Seng +3.1%

  • South
    Korea’s KOSPI closed for a holiday

  • Australia’s
    S&P/ASX 200 +0.16%

AUD update:

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