Asia market morning update - Singapore Q1 GDP miss
A muted commencement for Asia markets is eyed with the anticipation building for Friday’s releases including China’s March trade figures. Singapore’s Q1 GDP, serving as a bellwether for the region missed in the morning release.
A sense of suspense hangs over Wall Street with the low volume characterizing trade on Thursday as investors await fresh leads. This had seen to both the S&P 500 index and Dow ending a flicker from neutral, with bulls and bears both unwilling to take a strong stand just ahead of the Q1 earnings season commencement. Indeed, the first releases oftentimes lead the expectations for the wider banking sector with JPMorgan and Wells Fargo kickstarting the latest round. Amid the backdrop of a patient Fed and uncertainties in the macro picture, including over the growth situation and US’ trade relations with major trading partners, the outlook from these companies will likely be king here in guiding market action into the end of the week.
MAS policy unchanged, Q1 GDP miss
Notably, this morning’s Q1 GDP release from Singapore saw to a miss on the headline reading. The advance estimate for Q1 GDP came in at 1.3% year-on-year against the consensus 1.5% and the Q4’s 1.9%. Drilling down to the sectors, it is of little surprise to see the manufacturing sector serving as the drag here, down 1.9% year-on-year after growing 7.2% for the whole year in 2018. Both the construction and services segment pulled their weight.
This had arrived alongside the Monetary Authority of Singapore (MAS) policy meeting statement with no changes to policy as broadly expected. Notably, however, the MAS had also lowered their 2019 core inflation forecast to 1-2% from 1.5-2.5% previously while growth forecast had been kept unchanged at 1.5-3.5%.
The disappointment stemming from the Q1 GDP miss saw USD/SGD popping slightly upon release to a 1-month high before returning to $1.3560 levels once again. Serving as a bellwether for the region with one of the earliest Q1 GDP update in Asia, this had been another sign of weakness and preludes China’s GDP update later in the month. That said, this had been set against the backdrop of an overtly soft start to the year and remains backward looking numbers. The focus is up next on China’s March trade reading for further signs of stabilization.
Trailing Wall Street, the lack of fresh impetus provides little ahead of the key trade data out of China. Early movers in the region had commenced the session mixed including the ASX 200 and Nikkei 225, though the latter can be seen catching a bid with USD/JPY on the climb. As told above, the focus is set on China’s March trade data. Following the stronger than expected manufacturing PMI and PPI, hopes appear to be spreading across the market for a surprise here as well. Still, the external picture remains uncertain, but any good news will be one to give Asia markets another boost. As far as AUD/JPY is concerned, one pair to look at to trade the Chinese release today, the market is clearly cheering a good set of figures before the release this morning.
Yesterday: S&P 500 0.00%; DJIA -0.05%; DAX +0.25%; FTSE -0.05%
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