Aussie dragged down with copper by China data; NZ stocks climb

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Weaker-than-expected Chinese economic data weighed on the Australian and New Zealand dollars as copper futures dropped, while Asian index futures signaled gains following a rebound in global equities.

The Aussie retreated from an eight-month high and the kiwi snapped a two-day climb after China issued figures at the weekend that indicated momentum in factory output and retail sales is slowing. The Turkish lira also dropped after at least 34 people were killed in a suicide car bomb in Ankara. New Zealand’s stock benchmark opened higher after index futures from Japan to Hong Kong rallied Friday amid a 1.8 percent surge in the global equity index. Copper fell 0.3 percent early Monday, and crude oil also retreated.

Risk appetite got a shot in the arm Friday as investors reconsidered the European Central Bank’s unprecedented stimulus package and as U.S. crude oil climbed to its highest settlement price this year. With ECB chief Mario Draghi almost skewering his monetary easing announcement last week, the focus now shifts to the Bank of Japan and the Federal Reserve, which update on policy in the next few days. In China, central bank Governor Zhou Xiaochuan said “excessive” stimulus wouldn’t be required to achieve the nation’s growth goal of at least 6.5 percent over the next five years, even after the weak factory output and retail data and a report showing the broadest measure in new credit dropped.

“China’s weekend data was underwhelming,” Kymberly Martin, a markets strategist in Wellington at Bank of New Zealand Ltd., said in a note e-mailed to clients. “Sentiment toward Australasian currencies may be a bit less warm. Markets are likely to take the data at face value and they may be viewed with concern relative to China’s 6.5 percent to 7 percent full-year GDP target.”

Japan reports on machine orders Monday, ahead of Tuesday’s BOJ statement. Australia issues credit card data and India updates on wholesale prices. Data on Hong Kong factory output and producer prices is due, along with a review of interest rates in Kazakhstan.

Currencies

The Aussie fell 0.2 percent to 75.47 U.S. cents as of 7:20 a.m. Tokyo time, after rallying 1.5 percent on Friday amid the revival in demand for risk investments. The kiwi was down 0.4 percent, extending last week’s 0.9 percent retreat.

The lira halted a four-day advance, losing 0.4 percent versus the dollar and declining 0.3 percent against the euro. The car bomb, which wounded more than 120 people, marked the third time Turkey’s capital has been hit in five months. Two public buses were burned out in Sunday’s blast, which happened about 650 feet from Prime Minister Ahmet Davutoglu’s office.

The euro lost as much as 0.2 percent early Monday amid a weak showing for German Chancellor Angela Merkel’s party in state elections on Sunday. Merkel’s Christian Democratic Union failed to recapture the southwestern region of Baden-Wuerttemberg from the Greens, placed second to the Social Democratic Party in the western region of Rhineland-Palatinate. The anti-immigration Alternative for Germany party made significant gains in Saxony-Anhalt, in the formerly communist east, according to ARD TV projections.

Stocks

New Zealand’s S&P/NZX 50 Index added 0.3 percent, with futures on Australia’s S&P/ASX 200 Index up 0.8 percent at the end of Friday trading.

Futures on the Standard & Poor’s 500 Index dropped less than 0.1 percent early Monday, after the index surged 1.6 percent on Friday to cap a fourth straight weekly advance.

In Japan, Nikkei 225 Stock Average futures climbed 1 percent to 17,020 in Osaka at the end of last week, while yen-denominated contracts traded in Chicago gained 0.1 percent to 17,065. Futures on the Kospi index in Seoul advanced 0.7 percent.

Futures on the Hang Seng Index in Hong Kong increased 0.5 percent on Friday, as those on the Hang Seng China Enterprises Index, which tracks mainland stocks listed in the city, rose 0.9 percent. FTSE China A50 Index futures gained 0.8 percent in most recent trading.

(Bloomberg)

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