CNH: USD/CNH Holding Above Simple 200-day MA, CNY CFETS Basket To Fresh Lows

• China saw an increase in in new Yuan loans, despite the impact of an earlier Lunar New Year break.
• January new loans surged by CNY5.13tn ahead of expectations of CNY4.5tn.
• Aggregate financing rose by CNY7.06tb, again higher than forecasts.
• Despite the better than expected results, the underlying details shows that the impact of increasing government bond sales are a major input into the data improvement.
• Whilst typically January is slow for new loans, this year it was stronger – a sign potentially that risk appetite could be on the improve with better than expected corporate loans, but new mortgages declining YoY. 

The RBNZ decision is announced on Wednesday and it is widely expected to cut rates 50bp again to 3.75%. Revised staff forecasts will also be published with the decision at 1200 AEDT/1400 NZDT and Governor Orr’s press conference taking place at 1300 AEDT/1500 NZDT.

• All 22 analysts surveyed by Bloomberg are forecasting a 50bp rate cut and the RBNZ shadow board is recommending 50bp of easing.
• Q4 input/output PPIs are also on Wednesday. They rose 1.9% q/q and 1.5% q/q in Q3 respectively.
• On Tuesday, the RBNZ’s household inflation expectations survey is released for Q1. The series tend to run above the business survey, released last week at about 2%, and in Q4 most timeframes were around 3% on a median basis.
• Trade data for January is on Friday. The deficit has been slowly improving and YTD it was NZ$7.67bn in December. In 2024, the US became NZ’s second most important export destination pushing Australia to third.

This week the focus will be on Tuesday’s RBA decision and a 25bp rate cut is widely expected by economists. There are also Q4 wages on Wednesday and January jobs data on Thursday. 

• The RBA statement and updated forecasts will be released at 1430 AEDT with Governor Bullock’s press conference at 1530 AEDT. 30 out of 34 analysts surveyed on Bloomberg are forecasting 25bp of easing and market pricing is at an 83% chance.
• On Friday, Governor Bullock, Deputy Governor Hauser, Assistant Governor (Economic) Hunter and Assistant Governor (Financial System) Jones appear before the House of Reps Economics Standing Committee.
• On Wednesday, the Q4 WPI is released and is forecast to post another 0.8% q/q rise bringing the annual rate down to 3.2% from 3.5% in Q3.
• January employment is projected to rise 20k on Thursday after 56.3k the previous month, which would drive the unemployment rate up 0.1pp to 4.1%. The participation rate is expected to be stable at 67.1%.
• Westpac’s leading index for January is out on Wednesday. It has been signalling a gradual improvement in growth.
• On Friday, preliminary February S&P Global PMIs are published. In January they all printed above the breakeven-50 mark.