Fri, 24th February 2017

Anirudh Sethi Report


Archives of “Economy” Category

China October trade balance: CNY +325.25bn (expected CNY366.61bn, prior CNY278.35bn)

The trade surplus in yuan terms, the USD terms data will come a little later. For the month of October.

China trade balance: +325.25 bn yuan. A miss on expectations.

  • expected is CNY366.61bn, prior was CNY278.35bn

Exports (CNY) y/y: -3.2% MISS

  • expected is -0.8%, prior was -5.6%
Imports (CNY) y/y: +3.2% MISS
  • expected is +5.0%, prior was +2.2%
AUD/USD is hitting its session low, its been weak all day here (after the first hour of Sydney trade anyway)

The “USD terms” should be soon … OK, here they come …

China trade balance USD +49.06bn. Surplus smaller than expected but up from the prior month.

  • expected is $51.7bn, prior was $41.99bn

Exports (USD) y/y:  -7.3% MISS

  • expected is -6.0%, prior was -10.0%

Imports (USD terms) y/y : -1.4% MISS

  • expected is -1.0%, prior was -1.9%

AUD extending its session lows (just a bit)

India : Fiscal deficit status

Fiscal deficit in the first half of the current fiscal stood at Rs 4.47 lakh crore, or 83.9 per cent of the budget estimate (BE) for the whole year. The fiscal situation in April-September deteriorated over the year-ago period as the deficit then stood at 68.1 per cent of the budget estimate of 2015-16. Fiscal deficit, the gap between expenditure and revenue for the entire fiscal, has been pegged at Rs 5.33 lakh crore, or 3.5 per cent of GDP, in 2016-17. According to data released by the Controller General of Accounts, tax revenue came in at Rs 4.48 lakh crore, or 42.5 per cent of the full year BE of Rs 10,54,101 crore.

India -Core sector grows 5% in Sept

India’s core sectors – coal, crude, natural gas, refinery products, fertilisers, steel, cement and electricity – rose 5 per cent in September compared with 3.2 per cent in August.

Data showed the eight core industries grew 4.6 per cent in the April-September period.

With a weightage of some 38 per cent of India’s industrial output, core sector index is seen as a barometer of how India’s industry is doing.

 Steel was the best performer despite the downturn in the global market, reporting a 16.3 per cent growth, nearly as much as the 17-month high of 17 per cent reported in August.

Analysts said the range of tariff protection that India has given to the steel sector from dumping by Chinese and East Asian competitors helped.

“Steel growth shows that demand from downstream industries remains and that they are replacing imports with domestic production,” said Sudipto Bose, an independent steel sector market analyst.

The refinery sector reported the second highest growth rate at 9.3 per cent, while cement, which reflects on downstream construction and infrastructure, showed a 5.5 per cent growth.

However, electricity generation grew just 2.2 per cent while fertiliser grew 2 per cent. Three key sectors – coal, crude and natural gas – contracted. Coal output contracted 5.8 per cent, natural gas output shrank 5.5 per cent, while crude production contracted 4.1 per cent.

October 2016 Eurozone CPI 0.5% vs 0.5% exp y/y

Highlights from the October 2016 Eurozone flash CPI data report 31 October 2016

  • Prior 0.4%
  • Core 0.7% 0.8% vs 0.8% exp. Prior 0.8%

Something’s not right as the 0.7% core is from Rtrs and Bloomberg is reporting 0.8%

It’s 0.7% ex-food & energy, 0.8% ex-everything. The core everyone looks at is ex-everything so that’s what we’ll go with.

US Q3 advance GDP +2.9% q/q annualized vs +2.6% expected

Highlights of the first look at US third quarter GDP. Oct 28, 2016

  • Q2 was at 1.4%
  • Personal consumption 2.1% vs 2.6% exp. Prior 4.3%
  • PCE 1.5% vs 1.4% exp.
  • Core PCE 1.7% vs 1.6% exp
  • GDP sales 2.4% vs 3.2% exp. Prior 1.3%
  • Employment costs 0.6% vs 0.6% exp. Prior 0.6%
  • Wages 0.5% vs 0.6% prior
  • Benefits 075% vs 0.5% prior
  • GDP deflator 2.2% vs 1.8% exp. Prior 0.4%. Revised to 0.5%
  • Exports 10.0% vs +1.4% prior
  • Imports +2.3% vs +0.2% prior
  • Inventories +$12B

That exports number is a big outlier that could have skewed the numbers. There is talk that soybean exports threw off the trend and that might have been priced in. The inventory data is hotter than expected as well so this number really isn’t as good as it looks.

Here are 5 things to watch in the US Q3 GDP Report

The third quarter advanced estimate for US GDP is due at 8.30am NY time

  • (1230GMT)
  • Bloomberg median consensus is at 2.6% (q/q annualised)
  • But Goldman Sachs is expecting much higher, at 2.9%
In brief (but go check out the link for more):
1 Long-Awaited Breakout? … (loooooong expected, hasn’t happened yet though)
2 Consumer Spending … expected to have slowed
3 Business spending … watch for capex from firms
4 Inventory Turn … has been a drag
5 Government Pullback … pullback in government spending was another drag on output gains in Q2