FXTRADING Economic Data Summary (Asia-Pacific | 03/24)

Canadian consumption data comes in slightly below market expectations

Canada‘s retail data at the start of the year was not particularly weak overall. Retail sales rose 1.1% month-on-month in January to a total of CAD 70.7 billion, although this result fell slightly short of the market’s earlier expectation of a 1.4% increase. Structurally, the growth was relatively broad-based, with six of nine subsectors expanding, among which motor vehicles and parts sales made the most significant contribution and became the main driver of the overall increase in retail activity.

If volatile components such as gasoline and automobiles are excluded, core retail sales still increased steadily by 0.9% month-on-month. The main source of growth came from general merchandise retailers, whose sales rose 3.0% from the previous month and have now recorded gains for four consecutive months.FXTRADING believes that Canadian consumption demand remains relatively stable overall, but the slower-than-expected pace of growth suggests that household spending is gradually becoming more cautious, and future consumption performance will continue to be influenced by interest rates and labor market conditions.

Both external and internal demand in Europe are under pressure

Trade data at the beginning of the year suggests that the euro area economy has started on a relatively weak footing. In January, eurozone exports fell 7.6% year-on-year to EUR 215.2 billion, while imports declined 7.3% to EUR 217.2 billion, leaving a trade deficit of EUR 1.9 billion. At the same time, intra-eurozone trade also declined, falling 3.3% year-on-year, indicating that demand within the region itself has also softened.

Across the broader European Union, the situation appears even more pronounced. Exports fell 10.0% year-on-year, while imports declined 9.0%, resulting in a trade deficit of EUR 5.9 billion. A further breakdown of trading partners shows that exports to the United States dropped sharply, falling 27.8% year-on-year and significantly narrowing the trade surplus with the U.S. Meanwhile, the trade deficit with China remained relatively large, while trade with the United Kingdom and Switzerland stayed comparatively stable. FXTRADING believes that the contraction in European trade reflects the dual pressure of cooling global demand and weak domestic economic conditions within Europe. If external demand fails to recover in the near term, the eurozone economy may continue to face considerable growth challenges.

Australias employment structure shows signs of divergence

Australias latest labor market data appears quite strong on the surface. Employment increased by 48,900 in February, far exceeding the market expectation of around 20,000. However, a closer look at the details reveals some mixed signals. The unemployment rate rose from 4.1% to 4.3%, exceeding market expectations, suggesting that the labor market is not experiencing purely strong expansion.

Changes in the employment structure are particularly notable. Full-time positions declined by 30,500, while part-time jobs increased by 79,400, indicating that most of the new employment is concentrated in positions with relatively lower stability. At the same time, the labor force participation rate rose from 66.7% to 66.9%, meaning more people entered the labor market, which led to an increase of about 35,000 unemployed individuals. FXTRADING believes that while Australias labor market continues to expand, the quality of employment is gradually weakening, and this structural shift may imply that the momentum of future job growth could begin to slow.

New Zealands economic growth momentum clearly weakens

New Zealands latest economic data shows that GDP grew only 0.2% quarter-on-quarter in the fourth quarter, significantly below the market expectation of 0.4% and sharply slower than the 0.9% growth recorded in the third quarter. On an annual basis, GDP rose 0.2% year-on-year. Although the economy managed to achieve slight expansion, the clear slowdown in quarterly growth suggests that economic momentum is weakening.

From an industry perspective, the services sector remains the main pillar supporting growth. Rental, hiring, and real estate-related activities increased 0.8% quarter-on-quarter, while retail and accommodation rose 1.3%. Financial and insurance services grew 1.5%, information media and telecommunications expanded 1.9%, and arts and recreation increased 2.0%. However, other sectors performed more weakly. FXTRADING believes that New Zealands economy is currently still in a phase of slow recovery. While services continue to support growth, weak investment and construction activity mean that the overall momentum of economic recovery remains insufficient.

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