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Markets Morning Update

Asia shares near 2016 highs as China trade rebounds

Asian shares came close to their highs for the year on Wednesday after surprisingly upbeat Chinese trade data offered hope the Asian giant was finally stabilizing, underpinning both risk sentiment and commodity prices.

China reported exports jumped 11.5 percent in March compared to a year earlier, the first increase since June and well above market forecasts. That was a huge improvement on February, even though data at this time of year tends to be distorted by the Lunar New Year holidays.

Investor reaction took the improvement on trust and pushed up China-sensitive assets such as the Australian dollar  which briefly climbed atop 77 U.S. cents.

Shanghai stocks .SSEC sped ahead by 2.2 percent.

Japan’s Nikkei .N225 rose 2.8 percent for its biggest daily gain in six weeks.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 1.6 percent and came within a whisker of breaching its high point for the year so far.

Oil prices ran into profit-taking in Asia but still held much of the overnight gains made on reports Russia and Saudi Arabia may have reached agreement on an oil output cap.

However, Saudi oil minister Ali al-Naimi ruled out a crude output cut in comments made to Saudi-owned al-Hayat newspaper published on Wednesday.

Brent crude LCOc1 eased 52 cents to $44.16 barrel, after rising 4 percent on Tuesday. U.S. crude CLc1 lost 57 cents to $41.60, easing back from a four-month top.

WALL ST UP, YEN DOWN

A rally in energy stocks helped the Dow .DJI end Tuesday 0.94 percent firmer, while the S&P 500 .SPX gained 0.97 percent and the Nasdaq .IXIC 0.8 percent. The S&P 500 energy sector .SPNY jumped 2.8 percent.

All 10 S&P sectors closed higher and the Dow industrials posted their best day in about a month.

The lift in energy boosted the oil-sensitive Canadian dollar to near a nine-month peak while nudging the safe-haven yen back from recent highs.

Canada’s loonie stood at C$1.2765 per USD, not far from the overnight top of C$1.2750 – a level last seen in July.

The greenback was up at 108.91 yen having climbed from a near 18-month trough around 107.63 set on Monday. The euro rose to 123.80 yen EURJPY=R, putting further distance from a three-year low of 122.08 set last month.

Against the dollar, the euro eased to $1.1357  after turning around from a six-month peak of $1.1465. That helped the dollar index .DXY climb back above 94.258, from a near eight-month low of 93.627.

In other commodity markets, copper and iron ore sat on large gains while gold XAU= drifted off to $1,248.40 an ounce, having climbed to a three-week high of $1,262.60 on Tuesday.

“Higher oil prices are triggering a retreat in risk-off moves,” said Masaaki Yamaguchi, a Tokyo-based equity market strategist at Nomura Holdings Inc., . “Strength in the yen is also easing, and the currency market is tilted toward a risk-on direction. Chinese trade data released today was weak as commodity prices had fallen, but it’s improved from January and February and concern over the Chinese economy is retreating. These are all acting as positive factors for the market.”

France and Spain will release inflation data on Wednesday, while euro-area industrial output figures are also due. The U.S. will report on March retail sales, while the Bank of Canada is forecast to leave its benchmark interest rate unchanged at a monetary policy review.

France Inflation Rate  

France consumer prices fell 0.1 year-on-year in March of 2016, following a 0.2 percent drop in February and matching estimates. It is the second straight month of fall as a decline in cost of manufactured products and energy offset an increase in cost of food and services. On a monthly basis, consumer prices rose 0.7 percent, up from 0.3 percent in the preceding month and in line with expectations.France averaged 4.55 percent from 1958 until 2016 CPI

france-inflation-cpi

 

Spain Inflation Rate  March 2016

Consumer prices in Spain decreased 0.8 percent year-on-year in March of 2016, the same as in the previous month and in line with preliminary estimates, final figures showed. It is the third straight month of falls, dragged down by lower prices for housing, fuels and lubricants. Inflation Rate in Spain averaged 6.94 percent from 1955 until 2016

spain-inflation-cpi

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