Japanese Exports To China Down By 15.8%
The Asian trading session was dominated by weak risk appetite, amid Japan's weak export figures and North Korea's nuclear test threats. The Japanese December trade deficit decreased to Yen-641.5bln (vs. Yen-522.8 exp. & Yen-954.8B November deficit revised); the exports fell by 5.8% (vs. 4.2% exp.), while the exports to China slumped by 15.8%. The Japanese deficit registered its deficit record in 2012 (Yen 6.9273 trln), after a second year of straight annual deficit. In China, HSBC Flash Manufacturing PMI firmed in January (51.9 vs. December 51.5), the new export orders improved to 50.1 (vs. December 49.2), while the output index increased to 22-month high, 52.2 vs. 51.9 in December reading. In New Zealand, December PMI entered the expansion zone, 50.1, from November's 48.8 reading.
Despite weak economic numbers from Japan, the Nikkei 225 added 1.2766, amid the Japan's deputy Economy Minister said that the Yen's correction from strong levels is not over yet. USDJPY rallied to 89.46, while EURJPY and GBPJPY consolidated two-day losses. Except Japan, the Asian stocks finished the day in red, as the positive Chinese PMI was offset by North Korean threat of nuclear test. Hang Seng index lost 0.15%, Shanghai's Composite erased 0.57%, Kospi and Taiex index retreated by 0.62%, and 0.80% respectively.
In North America, the stock futures slumped as Apple Inc. registered its slowest growth since 2009. The S&P and Nasdaq futures fell by 0.26 and 1.50% respectively. Bank of Canada kept its key rate unchanged at 1.0%. USDCAD rallied 100 pips, crossed over 1.00 psychological resistance for the first time since November 19th, 2012.
EURUSD swung between gains and losses overnight. The currency collapsed to 1.3265 in US session amid disappointment on Apple Inc., and rallied to 1.3347as China PMI restored the risk appetite, failing to extend gains further.
In Europe, UK PM Cameron's promise to hold a referendum for exiting EU made yesterday's headlines. Today, David Cameron will speak in WEF at 08:30 GMT, as well as Mario Monti (09:00 GMT) and Angela Merkel (12.15 GMT).
Today, the economic agenda is made of French and German January Markit PMIs, Euro-Zone Market PMI, Spanish Unemployment (Q4), Euro-Zone November current account balance and net investments, Italian November retail sales, Swiss m/m and y/y PPI, Swiss December Unemployment Rate, US Initial Jobless Claims as well as Us Continuing Claims.