Markets steady ahead of China trade data

Data seen mixed

The release of March’s trade data out of China is unusually late today, and markets are being held in limbo in the process. Expectations are that exports would rise 7.3% y/y after a 20.8% decline in February (New Year-related), while imports are seen falling 1.3% y/y after a 5.2% contraction the previous month. Consequently, the trade surplus is expected to widen to $7.05 billion from $4.08 billion. AUD/USD has been quiet in the run-up to the data, trading in a narrow 0.7116-0.7133 range. It is currently at 0.7131.

AUD/USD Daily Chart

Source: OANDA fxTrade

Singapore GDP growth below forecast

The Singapore economy grew less than economists had forecast in Q1, expanding 1.3% y/y, missing the estimate of +1.5% growth. This was the slowest annualized growth since 2016. A 1.9% annual contraction in the manufacturing sector was countered by growth in the services and construction sector. The government has predicted that growth in 2019 will slow to the midpoint of its 1.5 to 3.5% target range from 3.2% in 2018.

In response to the weaker expectations, the Monetary Authority of Singapore kept its policy unchanged at its semi-annual meeting, keeping the slope and the width of the Singapore dollar trading band, as well as the level at which it is centred. The MAS doesn’t fix interest rates, but uses the currency basket as its main tool of monetary policy.

In response to the dovish undertones of the MAS move, the Singapore dollar weakened across the board with USD/SGD rising 0.14% to touch 1.3581, the highest in a month. The FX pair is facing the 100-day moving average at 1.3592, which has capped prices since December 26.

USD/SGD Daily Chart

Source: OANDA fxTrade

A slow finish to the week

The data calendar is relatively sparse today, with German wholesale prices and Euro-zone industrial production for March the only items on the European calendar. The US session features March export and import prices together with the Michigan consumer sentiment index for April. This index is expected to slide to 98.0 from 98.4 in March, which could further cloud the outlook for the US economy.

Banking shares could be in the spotlight as Wells Fargo and JPMorgan announce first-quarter earnings that will lead off the reporting season today.

Have a great weekend.