Asian equity markets traded mostly positive after taking impetus from another record-setting session on Wall Street. following the recent US-China deal signing.
According to a daily economic calendar by EGM Securities, this sentiment was underpinned by encouraging earnings and data, while participants also digested a flurry of key Chinese data including GDP which grew in line with expectations.
ASX 200 (+0.3%) extended on all-time highs led by broad strength in mining names including Rio Tinto despite the Co. printing weaker Q4 iron ore shipments, although Nufarm was at the other end of the spectrum with double-digit losses after it flagged weaker earnings across several segments.
Nikkei 225 (+0.4%) was kept afloat by favourable currency flows, while Hang Seng (-0.1%) and Shanghai Comp. (-0.1%) initially gained after the continued PBoC liquidity efforts and a slew of tier-1 Chinese data in which GDP printed in line with expectations and both Industrial Production and Retail Sales topped estimates.
However, the data showed China’s 2019 growth slowed to 6.1% from 6.6% year on year which was the weakest since 1990 albeit still within the official 6.0%-6.5% target range.
SCMP opinion piece suggested that China will stick to the Phase 1 if it maintains China’s stability and that President Xi’s absence from the signing suggests Beijing is leaving it open by how much they will abide by, while China Global Times noted comments from an expert who suggested that even if China agrees to begin negotiations for a phase two agreement, it will likely demand that the US roll back all tariffs prior to talks. (SCMP/Global Times)
Bank of Korea kept the 7-Day Repo Rate at 1.25% as expected, while it stated that the South Korea economy is forecast to grow at lower 2% level this year and inflation will gradually reach 1%, while it added growth is in line with previous projections and downturn in exports is likely to ease.
Furthermore, Bank of Korea Governor Lee said it would be appropriate to keep policy rate above rates in advanced economies and that the rate decision was not unanimous with board members
Within the EU and UK, German Defence Minister Kramp-Karrenbauer suggested the EU should offer Britain “privileged third-party status” in defence and foreign policy cooperation post-Brexit following a meeting with her UK counterpart Ben Foster.
EU Trade Commissioner Hogan said EU wants to strengthen economic ties with US and that he had very good talks with US Treasury Secretary Lighthizer.
Hogan who also reiterated EU’s plan for retaliatory tariffs over Boeing aid but also told US officials again that the EU is keen to work towards a negotiated solution on the aircraft subsidy issue.
DXY was relatively flat and held near the prior day’s highs following recent strong US data, while its major counterparts were indecisive. GBP/USD was also relatively unchanged and remained near this week’s best levels.
