Improvement in UK current account and GDP

The current account deficit fell to 25.3 billion in Q4 versus 27.7 billion in Q3.

The full Q4 trade balance report can be found here.


The final Q4 GDP recorded a growth of 0.6%, revised up by 0.1% from last month`s estimate.

The GDP report can be found here.

In summary, these two crucial data out today showed an improvement from the prior period`s results.

An update on Hovid WB and its mother share

In my earlier post, Hovid WB was one of the warrants I identified with the potential to appreciate. At the pre-closing, the last done price for the mother share and WB warrant is RM 0.44(+2.3%) and RM 0.25(+4.2%) respectively.

The call warrant is still in the money as it is trading at a 1.1% discount. To put this in layman terms, due to inefficiencies in the market, theoretically there`s a risk free profit of 1.1% to be made. 

Harta CM up by 14.6% today

I completed my analysis pretty late today, just 15 minutes before the market opened.

Harta CM was the best performer today with a 14.634% appreciation in a day.

Here is the breakdown of the specifications of this call warrant:
- Exercise ratio: 6
- Strike price: RM 5.70

Sunway CI remained in the money till the end

On Sunday I posted on instagram my analysis on a couple of in the money call warrants on Bursa.

Sunway CI is number 6 in the list and I highlighted it due to it`s relevance. At the time I posted the table, it was in the money, with a 6.25% discount. I cannot say that it is 100% risk free to profit, but it is nearly risk free.

The last trading day for this warrant was yesterday and the final price remained at RM 0.155. The mothershare closed at RM 3.63 today.

To put this into perspective, for every 10 000 units of the CI warrant, the cost is RM 1 550 with a profit of RM 300. This is nearly a 20% gain, not bad for a trade that lasted for only a couple of days.

Durable good orders in the US fell

Core durable good orders decelerated by 0.4%. The strong dollar and slump in energy production was blamed for the negative growth.

Bloomberg has a write up on this.

NZ dairy drives exports down

New Zeland`s trade balance recorded a surplus of 50 million in February, short of the estimated 375 million. This is still an improvement over January`s 33 million.

Dairy is said to have caused the fall in the trade balance due to low prices and a drop in exports. The trade report can be found here.

US CPI and core CPI grew by 0.2%

Inflation in the US was steady as both CPI (consumer price index) and core CPI grew by 0.2% in February. 

The inflation report is provided by the Bureau of Labor Statistics. 

UK inflation at zero in February

It looks like the Bank of England governor Mark Carney did not stick to his words when he said that inflation levels will not reach zero.

The full inflation report for February can be obtained from the Office of National Statistics.

German private sector increases at the strongest pace in 8 months

The German flash manufacturing PMI in March accelerated to 52.4, the highest growth seen in 8 months.

The March report can be found here.

French manufacturing contracted but...

The French manufacturing PMI (purchasing managers index) stood at 48.2 in March. Although any level below 50.0 indicates a contraction in the industry, this is the second month in a row the manufacturing index climbed.

The full report can be found here.

FOMC member Fisher`s speech at the Economic Club of New York

FOMC member and vice chair, Stanley Fisher delivered an informal speech at the Economic Club of New York.

I will not summarize it as it is just a recap of what the official FED speeches have been saying. His speech can be found here.

Glenn Steven`s speech to the AMCHAM

The Reserve Bank of Australia (RBA) governor Glenn Stevens spoke at the American Chamber of Commerce in Australia today. His speech can be found here.

Philly Fed: Manufacturing index down

The Philly Fed manufacturing index dropped to 5.0, after last month`s uninspiring level at 5.2. Economists were expecting a level of 7.0.

The full business outlook survey for March can be found here.

Slight increase in unemployment claims

The weekly unemployment rate recorded a rise of 1 000 this week to 291 thousand.

Euro LTRO at 97.8 B

The targeted long term refinancing option (LTRO) by the European Central Bank stood at 97.8 billion, considerably less than the 129.8 billion for the previous period. This is the total value of money the ECB will create and use to loan Eurozone banks.

Reuters has a good report on this area.

New Zealand GDP grew by 0.8%

The New Zealand economy grew by 0.8%, meeting the forecasted growth rate. The full report can be found here.

FOMC economic projections

The economic projection by the Federal Open Market Commitee (FOMC) can be found here.

UK`s annual budget

The annual budget release can be found here. The meeting started at 11.34 am and ended 7.31 pm.

MPC votes unchanged

The Monetary Policy Committee (MPC) voted 0-0-9 which translates to all of them agreeing to hold rates.

Earnings index growth slows down to 1.8%

I was discussing with Clarence Lim, a trading associate yesterday on why I knew the earnings index would paint a red picture: Wages are not growing in the UK. Take a look at any job ad and see the wages there. Clarence Lim also said to short GBP/JPY.

The average earnings index increased by 1.8% in January, down from 2.1% in the previous period.

Claimant count saw a reduction of 31.0 thousand compared to 39.4 thousand in the previous period.

The labour market report can be found here.

GDT: Major fall in dairy prices

The GDT index fell by 8.8% after months of upward movement.

Building permits increase

Building permits increased to 1.09 million in the US, from 1.06 last month.

German economic sentiment rises to 54.8

The ZEW economic sentiment rose to 54.8 in March, making this the fifth consecutive month the index climbed.

The press release can be found here.

BoJ: Cheaper energy prices would bring inflation to a stall

The fall in energy prices would bring inflation in Japan to a stall, said the Bank of Japan (BoJ) in its monetary policy statement. The monetary base expansion remained at a pace of 80 trillion yen per year.

In terms of wages, a 1% increase is needed to sustain Japan`s economy growth after 20 years of stagflation.

Australian monetary policy minutes

The Reserve Bank of Australia (RBA) held the cash rate at 2.25%. 

In the monetary policy statement, it was stated that "taking account of all these factors, members judged it appropriate to hold the cash rate steady for the time being, while recognising that further easing over the period ahead may be appropriate to foster sustainable growth in demand while maintaining inflation consistent with the target."

The full statement can be found here. 

UoM: Decline in consumer sentiment

The preliminary University of Michigan (UoM) survey for consumer confidence showed that consumers are bearish. The index was measured at a level of 91.2 in March, the lowest in four months. The index dropped from February`s 95.4.

Bloomberg has a write up on this.

Producer prices down for forth straight month

The producer price index (PPI) dropped to -0.5% in February.

The full report can be found here.

Unemployment claims improved

This week`s unemployment claims recorded an improvement to 289 thousand people filling for unemployment insurance. This is a significant change from last week`s 325 thousand claims.

Retail sales down for the third consecutive month

For the third straight month, retail sales dipped in the US. Core retail sales contracted by 0.1% while retail sales dropped by 0.6%.

Australian jobs data looking good

The unemployment rate in Australia fell further to 6.3% in February, a slight improvement from January`s 6.4%. Employment increased to 15 600 new jobs being created.

Bloomberg remarked that the lower jobless rate masks the faltering outlook. The full labour force report can be found here.

RBNZ: Official bank rate unchanged at 3.5%

The Reserve Bank of New Zealand kept the official rate unchanged at 3.5%.

The domestic economy remains strong and the fall in energy prices have increased the purchasing power of households. As usual, the statement mentioned that the New Zealand dollar is unsustainably and further depreciation of the currency is needed to keep the economy competitive.

The monetary policy statement can be obtained here. 

UK manufacturing growth in negative region

 The key points of the production report are:

• Total production output is estimated to have increased by 1.3% in January 2015 compared with January 2014. There were increases in two of the four main sectors, with manufacturing output being the largest contributor, increasing by 1.9%.
• There were increases in eight of the 13 manufacturing sub-sectors compared with a year ago and the largest contributor was the manufacture of transport equipment, increasing by 6.1%.
• Total production output decreased by 0.1% in January 2015 compared with December 2014. There were increases in two of the main sectors, with mining & quarrying output being the largest contributor, increasing by 2.0%.
 • Manufacturing output decreased by 0.5% in January 2015 compared with December 2014. The main components contributing to this decrease were the manufacture of computer, electronic & optical products; the manufacture of machinery & equipment not elsewhere classified; and the manufacture of food, beverages & tobacco.
 • In the three months to January 2015, production and manufacturing were 10.4% and 4.8% respectively below their figures reached in the pre-downturn GDP peak in Q1 2008.
 • In this release, periods back to January 2014 were open for revision, in line with the National Accounts revisions policy. There was minimal impact on previously published GDP estimates resulting from revisions to these periods.

The full report is provided by the Office of National Statistics.

Weakest start in 6 years for China`s industrial production

China`s industrial output saw a drop to 6.8% from the prior period`s 7.9% growth. Economists are suggesting that more stimulus is needed for the economy to speed up.

China`s inflation accelerates in February

China`s consumer price index, the core measure of inflation accelerated to 1.4% in February. Economists were predicting a growth of 1.0% for the month. In January, inflation grew by just 0.8%.

The rise in inflation have been attributed to the higher prices in fruits and vegetables.

Australian business confidence gets no lift claims Reuters

The NAB business confidence fell to 0, down from last month`s 3. This is the lowest level since 2013.

Reuters said that the business confidence gets no lift from the recent rate cut by the Reserve Bank of Australia (RBA) 

China`s trade balance exceeds estimates by a huge margin

China`s trade balanced closed at a surplus of 60.6 billion compared to the estimated 7.8 billion. The prior period recorded a surplus of 60.0 billion.

Bloomberg has an article that covers this area.

Employment in the US improves

Non-farm employment change recorded 295 thousand new jobs being created in February, a healthy increase of the prior period`s 239 thousand. The unemployment rate dropped to 5.5% from 5.7%.

The full labour report can be obtained here.

ECB ready to buy bonds, Euro tumbles.

As with any official ECB press conference, the Euro depreciates against major currencies. Mario Draghi announced that the central bank is ready to purchase bonds. What this means is that there will be more cash in the economy and this in turn causes a currency to fall. Hence, inflation is also expected to pick up.

The videostream of the press conference can be found here.

Here is the EUR/USD chart to see how the Euro dropped against the US dollar.

Minimum bid rate remained at 0.05%.

Swiss foreign reserves up

Swiss foreign currency reserves increased to 509.3 billion from 498.5 billion.

Unemployment claims up by 7 000

This week`s unemployment claims recorded an increase to 320 000 claims.

UK official bank rate unchanged

The Bank of England maintained the official bank rate at 0.5%.

Aussie retail sales up, trade balance worse than previous period

Retail sales grew by 0.4% in January, following a rise of 0.2% in December. This is in line with estimates.

The key points include:

• The trend estimate rose 0.2% in January 2015. This follows a rise of 0.2% in December 2014 and a rise of 0.3% in November 2014.
• The seasonally adjusted estimate rose 0.4% in January 2015. This follows a rise of 0.2% in December 2014 and a relatively unchanged (0.0%) November 2014.
• In trend terms, Australian turnover rose 3.1% in January 2015 compared with January 2014.
• The following industries rose in trend terms in January 2015: Household goods retailing (0.3%), Food retailing (0.1%), Clothing, footwear and personal accessory retailing (0.7%), Cafes, restaurants and takeaway food services (0.3%) and Department stores (0.5%). Other retailing (-0.2%) fell in trend terms in January 2015.
• The following states and territories rose in trend terms in January 2015: Queensland (0.4%), Western Australia (0.4%), New South Wales (0.1%), South Australia (0.3%), Tasmania (0.1%) and the Northern Territory (0.1%). Victoria (0.0%) and the Australian Capital Territory (0.0%) were relatively unchanged in January 2015.

The retail trade report can be found here.


Trade balance was a deficit of $ 0.98 billion in January, worse than the estimated $ 0.94 and an increase from December`s $ 0.50 billion deficit.

A through breakdown can be found from the trade balance report.

ISM non-manufacturing PMI at 56.9

The non-manufacturing PMI by the ISM showed that the services industry expanded in February. February recorded a figure of 56.9, up from January`s 56.7. The full report can be found here.

Take note that this is not the official PMI by the government.

UK services growth eases

The service sector in the UK continued to experience growth, albeit at a slightly slower pace than the previous period. The services PMI in February fell to 56.7 from January`s 57.2. As this is an index, any figure above 50.0 indicates an expansion in the particular industry.

Both input and output prices increased at sharper rates.

Interestingly, the employment rise is the second fastest in the survey history.

The full report can be obtained here.

Australian GDP increased by 0.5% for the December quarter

The Australian economy grew at an average pace, for the December quarter, the GDP growth recorded was 0.5%. This is a slight improvement from the 0.4% growth in the September quarter.

The key figures can be found here.

GDT up for the 6th consecutive time

The GDT price index increased for the sixth time. It grew by 1.1% this time.

UK construction expansion at a 4 month high

The construction industry showed a sharp expansion, with the construction PMI at 60.1 in February. This is the fastest expansion since October 2014.

The key points of the report include:
- Output growth rebounds further from December`s 17 month low.
- Sharp rise in incoming new work.

The full report can be found here.

Spanish unemployment reduced by 13.5 thousand

It is rare for the Euro zone to produce good data but today is one of the exceptions. Spanish unemployment was reduced by 13.5 thousand compared to a massive gain of 78 thousand in the previous period.

RBA: No change in rates

After the cut by 25 basis points last month, it is no surprise that the Reserve Bank of Australia (RBA) kept rates constant in the rate decision today.

The monetary policy decision can be found here.

Insane growth in Australia`s housing market

The high growth was so unexpected that Business Insider used the headline "The Australian housing market is on fire." Building approvals accelerated by 7.9% in January, compared to -2.8% in December.

The article also highlighted the imbalance in the Australian economy as growth currently is fueled mainly by the housing market.

The full report on the building approvals can be found here.

Euro`s annual inflation prediction up to -0.3%

Eurostat, the statistical office of the European Union predicted the inflation in the euro area to be -0.3%, up from -0.6% in January.

Here is the press release .

UK`s manufacturing rises to a 7 month high

The UK manufacturing PMI rose to a 7 month high in February to 54.1. This shatters estimates and January`s figure.

The key points in the PMI report are:
- Growth rates in outputs and new orders increased
- Domestic market remains solid but export orders dropped
- Input costs and output prices fall further

The full press release can be obtained here.

HSBC indicates manufacturing up, contradicting official figures

The HSBC final manufacturing PMI indicated that the manufacturing industry expanded in China. This contradicts the earlier official PMI released a day ago.

Here`s the report by HSBC.

China`s manufacturing contracts again to 49.9

Manufacturing PMI in China contracted once again this year to a level of 49.9. An expansion in this area requires an index value of 50.0 and above.

This is a tiny improvement from last month`s 49.8 and beating the estimated 49.7.