- Japan recorded trade surplus last month, collecting 440 billion Yen ($3.9 billion) more than spending on imports. YoY growth in exports was 9.7% vs expectations of 9.5% while imports rose by 15.5% vs expectations of 14.4%. Shipments rose to China by 19%, to the US by 7% and to the EU by 9%. That said, BoJ this morning left policy rates unchanged and now expects to reach its 2% inflation target by April 2019 vs a previous projection of around mid-2018. It also lowered inflation forecast for the current year to 1.1% and 2018 to 1.5%, down from previous estimates of 1.4% and 1.7% respectively. The central bank pledged to maintain its yield-curve control program and asset purchases.
- Australia reported unemployment rate at 5.6%. Though the level is in line with the previous month, overall there has been an increase in participation rate from 64.9 to 65%. Full-time jobs surged by 62k after a 53.4k gain in May, the biggest two-month increase since January 1988, though part-time roles fell by 48k. AUD sustained its strengthening trend amid expectations that the next move by the central bank would be upwards towards raising rates after eight years of continual reduction in rates.
- Housing Start data out of the US was better than expected with residential starts increasing by 8.3% to a 1.22 million annualised rate vs the estimate of 1.16 million. Also May data was revised upwards to 1.12 million from 1.09 million. Permits, a proxy for future construction climbed 7.4% to 1.25 million annualised. The number is at four month high and augurs well for better 2Q GDP growth. The upcoming data today about jobless claims is likely to have reduced to 245k vs previous recording of 247k.
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Emirates NBD Research
