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Japan Manufacturing Sector Picks Up Steam In August - Nikkei

The manufacturing sector in Japan continued to expand in August, and at a faster rate, the latest survey from Nikkei revealed on Thursday with a manufacturing PMI score of 52.5.

That's up from 52.3 in July, and it moves farther above the boom-or-bust line of 50 that separates expansion from contraction.

Individually, input and output price inflation climbed to multi-year highs, while overall demand improved - although export orders failed to rise for a third straight month.

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New Zealand Trade Deficit Biggest Since 2009

New Zealand logged its biggest annual trade deficit in nine years on higher imports, data from Statistics New Zealand showed Friday.

The annual trade deficit for the year ended July 2018 was NZ$4.4 billion, the widest annual deficit since March 2009.

Annual imports rose NZ$6.9 billion or 13 percent from last year to NZ$60.7 billion. At the same time, annual exports totaled NZ$56.2 billion, up NZ$5.7 billion or 11 percent on a year earlier.

"The rise in imports in the past year reflect large rises in both imports of petroleum and products, and in mechanical machinery and equipment," international statistics manager Tehseen Islam said. "Exports of dairy and meat products led the exports rise."

In July alone, the trade balance showed a deficit of NZ$143 million compared to a surplus of NZ$92 million a year ago.

Imports advanced 21 percent annually to NZ$5.5 billion, this was the second highest imports value ever. Exports rose 16 percent to NZ$5.3 billion.

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South Korea Consumer Confidence Weakens Further

South Korea's consumer confidence weakened for the third straight month in August, survey data from Bank of Korea showed Tuesday.

The consumer sentiment index dropped to 99.2 in August from 101.0 in July.

Consumer sentiment regarding current living standards was 2.0 points down from the preceding month at 89, while that concerning their future outlook was unchanged at 97.

Consumer sentiment as to future household income was 1.0 point lower than in the month before at 98, and that concerning their future spending one point higher at 106.

The index measuring current domestic economic conditions slid to 70 from 77 and that regarding future domestic economic conditions weakened from 87 to 82.

The expected inflation rate over the following year was 2.7 percent.

The survey was conducted among 2,200 households between August 13 and 20.

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Japan Retail Sales Gain 0.1% In July

Retail sales in Japan were up a seasonally adjusted 0.1 percent on month in July, the Ministry of Economy, Trade and Industry said on Thursday.

That missed expectations for an increase of 0.2 percent following the 1.5 percent spike in June.

On a yearly basis, retail sales climbed 1.5 percent - exceeding expectations for 1.2 percent and down from 1.8 percent in the previous month.

Sales from large retailers tumbled 1.6 percent on year, missing forecasts for a decline of 0.7 percent following the 1.5 percent jump a month earlier.

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China Manufacturing PMI Rises To 51.3 In August

The manufacturing sector in China continued to expand in August, and at a slightly faster rate, the latest survey from the National Bureau of Statistics showed on Friday with a PMI score of 51.3.

That beat expectations for a score of 51.0 and was up from 51.2 in July.

The bureau also said that the non-manufacturing PMI came in at 54.2 - also exceeding expectations for 53.7 and up from 54.0 in the previous month.

The composite index had a score of 53.8, up from 53.6 a month earlier.

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Japan Manufacturing Growth Improves In August

Japan's manufacturing growth improved slightly in August, final survey figures from IHS Markit showed Monday.

The Nikkei flash manufacturing Purchasing Managers' Index, or PMI rose to 52.5 in August from 52.3 in July. That was in line with the flash data published on August 23.

Any reading above 50 indicates expansion in the sector.

In line with stronger inflows of new work, firms raised production and employment in August.

However, business sentiment dipped amid uncertainty arising from global geopolitics. On the price front, input price inflation remained sharp in August and selling prices grew at the fastest rate in almost ten years.

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South Korea Q2 GDP Growth Slows More Than Estimated

South Korea's economic growth eased more than initially estimated in the three months ended June, latest figures from Bank of Korea showed Tuesday.

Gross domestic product advanced 0.6 percent sequentially in the second quarter, revised down from 0.7 percent rise seen in the flash report.

During the first quarter, the rate of expansion was 1.0 percent.

On the expenditure side, private consumption grew 0.3 percent over the quarter, while gross fixed capital formation declined by 2.9 percent.

Exports of goods and services gained 0.4 percent, while imports logged a fall of 3.0 percent

On an annual basis, GDP expanded at a steady pace of 2.8 percent in the June quarter.

The government forecasts the economy to grow 2.9 percent this year. The Bank of Korea also projected 2.9 percent growth for 2018, and 2.8 percent for 2019.


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Australia's Trade Surplus Falls In July

Australia's trade surplus decreased in July, the Australian Bureau of Statistics reported Thursday.

The trade surplus fell to a seasonally adjusted A$1.55 billion in July from A$1.94 billion in June. Nonetheless, this was above the expected level of A$1.45 billion.

Data showed that exports dropped 1 percent from the previous month, while imports remained broadly unchanged in July.

Export growth is likely to slow further through the second half of the year given the bulk of Australia's major LNG, iron ore and coal mines are now approaching output capacity and scope for further marginal increases appears limited, Tom Kennedy, an economist at J.P. Morgan, said.

As a result, the net export contribution to real GDP growth is expected to fade and become neutral by end-2018, the economist added.

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Malaysia's Industrial Output Growth Improves

Malaysia's industrial production growth accelerated more-than-expected in July, the Department of Statistics reported Friday.

Industrial output grew 2.6 percent year-on-year in July, faster than June's 1.1 percent increase. Output was expected to climb 1.4 percent.

The growth in July was supported by a 5.2 percent increase in manufacturing and a 4.5 percent rise in electricity. Meanwhile, mining output logged a decline of 5.9 percent. On a monthly basis, industrial production advanced 2.6 percent, reversing a 1 percent drop in June.

Another report from the statistical office showed that manufacturing sales expanded 9.6 percent from last year to MYR 70 billion in July.

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Ireland Construction Growth Remains Strong In August

Ireland's construction sector growth remained elevated in August, despite easing from July, survey data from IHS Markit showed Monday.

The Ulster Bank construction Purchasing Managers' Index dropped to 58.3 in August from 60.7 in July. However, any reading above 50 indicates expansion in the sector.

"The August survey results were also notable as they marked the 60th consecutive monthly expansion of construction activity, indicating that survey respondents have now been in recovery mode for five years following the extreme collapse which took hold during the financial crisis," Simon Barry, Chief Economist Republic of Ireland at Ulster Bank, said.

Among three monitored categories, the fastest growth was on residential projects. but, the pace of expansion moderated from July. The rate of growth in commercial activity also eased, while civil engineering activity rose for the second straight month.

New orders increased sharply, though the rate of growth slowed for the third successive month. Rising workloads forced companies to raise their staffing levels and purchasing activity in August.

On the price front, the rate of input price inflation quickened amid rising costs for a range of raw materials.

Firms were confident that new work on housing projects will help lead to increases in construction activity over the coming year.

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Japan M2 Money Stock Gains 2.9% On Year In August

The M2 money stock in Japan was up 2.9 percent on year in August, the Bank of Japan said on Tuesday - coming in at 1,006.1 trillion yen.

That was unchanged from the July reading following a downward revision from 3.0 percent.

The M3 money stock was up an annual 2.5 percent at 1,337.7 trillion yen - also unchanged from the previous month following a downward revision from 2.6 percent.

The L money stock was up 2.2 percent to 1,782.7 trillion yen, down from 2.3 percent a month earlier.

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Australia's Consumer Sentiment Deteriorates In September

Australia's consumer confidence deteriorated in September reflecting political instability and rises in mortgage interest rates, data from Westpac showed Wednesday.

The Westpac Melbourne Institute Index of Consumer Sentiment declined 3 percent to 100.5 in September. This was weakest since November last year.

Although the index remained in positive territory, the reading was just above the 100 level.

Data suggested that confidence has been affected by increases in mortgage interest rates, political instability and household budget pressures.

All sub-indices recorded declines in September with the 'economic outlook, next 5 years' showing the biggest move, a 5.8 percent decrease.

Consumer views around family finances remained notably weaker. The 'finances vs a year ago' and 'finances, next 12 months' sub-indexes both registered 3.6 percent falls in September.

Westpac said aside from the rise in mortgage interest rates, household budgets were also coming under persistent pressure from slow growth in wages, declining house prices in Sydney and Melbourne and the rising cost of petrol.

Further, data showed that consumers remained relatively downbeat on spending. The 'time to buy a major household item' sub-index declined 2.2 percent in September.

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Japan Core Machine Orders Surge 11.0% In July

Core machine orders in Japan were up a seasonally adjusted 11.0 percent on month in July, the Cabinet Office said on Thursday - coming in at 918.6 billion yen.

That beat expectations for a gain of 5.5 percent following the 8.8 percent slide in June.

On a yearly basis, core machine orders jumped 13.9 percent - also exceeding forecasts for 4.3 percent after adding 0.3 percent in the previous month.

The overall value of machine orders in Japan spiked 18.8 percent on month and 11.5 percent on year, standing at 2,630.4 billion yen.

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New Zealand Manufacturing Growth Remains Weak

New Zealand's manufacturing sector activity remained in low gear for the third consecutive month in August, survey data showed Friday.

The BNZ-BusinessNZ performance of manufacturing index rose 0.8 points to 52.0 in August. Although the indicator remained above 50.0, it was below the long run average of 53.4. At 52.6, production returned to expansion and the new orders sub-index rose to 53.2. Meanwhile, the employment sub-indicator fell back into contraction to its lowest since August 2016. The corresponding reading was 48.1.

BNZ Senior Economist, Craig Ebert said that "although the PMI improved in August, this was hardly different to the average of the previous two months, leaving the PMI running below normal in its growth signal".

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UK Household Finance Index Remains Close To Record High

UK households' perceptions of financial wellbeing remained close to survey-high in September, data from IHS Markit showed Monday.

The household finance index held steady at 45.9 in September, which was the second highest score since the survey began in February 2009.

Household finances were underpinned by improved earnings from employment and favorable labor market conditions.

UK households' outlook regarding future budgets strengthened in September. Moreover, income from employment increased in September.

At the same time, job security perceptions deteriorated, in contrast to the generally upbeat signal from the current and future household finance assessements.

Although expectations of further inflation were sustained in September, the proportion of households anticipating rising living costs was the lowest since November 2016, data showed.

"The HFI survey pointed to the second-lowest level of pessimism about future finances since the EU referendum," Joe Hayes, an economist at IHS Markit, said.

Nonetheless, the latest survey still raised some concerns about the outlook for consumer spending, Hayes added.

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Australia House Prices Slide 0.7% In Q2

House prices in Australia were down 0.7 percent on quarter in the second quarter of 2018, the Australian Bureau of Statistics said on Tuesday - in line with expectations and unchanged from the three months prior.

The capital city residential property price indexes fell in Sydney (-1.2 percent), Melbourne (-0.8 percent), Perth (-0.1 percent) and Darwin (-0.9 percent), and rose in Brisbane (+0.7 percent), Hobart (+3.0 percent), Adelaide (+0.3 percent) and Canberra (+0.6 percent).

On a yearly basis, house prices dipped 0.6 percent versus expectations for a loss of 0.7 percent after rising 2.0 percent in Q1.

Annually, residential property prices fell in Darwin (-6.1 percent), Sydney (-3.9 percent) and Perth (-0.9 percent), and rose in Hobart (+15.5 percent), Canberra (+3.0 percent), Melbourne (+2.3 percent), Adelaide (+2.1 percent) and Brisbane (+1.7 percent).

The total value of residential dwellings in Australia was A$6,926,538.0 million at the end of the June quarter 2018, falling A$13,321.1 million over the quarter.

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European Economics Preview: Germany Ifo Business Confidence Data Due

Business sentiment from Germany is due on Monday, headlining a light day for the European economic news.

At 2.00 am ET, Statistics Finland publishes producer prices for August. Prices had increased 0.4 percent on month in July.

At 3.00 am ET, the Czech Statistical Office is slated to release consumer and business sentiment survey results.

At 4.00 am ET, Germany's Ifo business sentiment survey data is due. The business sentiment index is seen falling slightly to 103.6 in September from 103.8 in August.

At 9.00 am ET, European Central Bank President Mario Draghi is set to speak at the ECON Hearing of the European Parliament in Brussels, Belgium.

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BoJ Minutes: Japanese Economy Continues To See Moderate Expansion

Members of the Bank of Japan's monetary policy meeting said that Japan's economic expansion is continuing at an acceptable pace, minutes from the bank's meeting on July 30 and 31 revealed on Tuesday.

At the meeting, the central bank retained its massive monetary stimulus as expected, including the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.

"The staff explained that one option would be to indicate that the Bank intended to maintain the current extremely low levels of short- and long-term interest rates for an extended period of time, taking into account uncertainties regarding economic activity and prices," the minutes said.

The bank will continue to purchase government bonds so that the yield on the 10-year Japanese government bonds remains at around zero percent.

The BoJ is set to conduct purchases of Japanese government bonds in a flexible manner so that the outstanding amount will increase at an annual pace of about JPY 80 trillion.

Annual inflation is expected to gradually continue rising towards the target goal of 2 percent, the minutes said. The inflation outlook was downgraded, while maintaining growth projections.

The inflation forecast for fiscal 2018 was trimmed to 1.1 percent from 1.3 percent. Likewise, the projection for fiscal 2019 was lowered to 1.5 percent from 1.8 percent and that for 2020 to 1.6 percent from 1.8 percent.

"With regard to the outlook, the year-on-year rate of change in the CPI (all items less fresh food) was likely to increase gradually toward 2 percent, mainly on the back of a rise in medium- to long-term inflation expectations with the output gap remaining positive," the minutes said.

At the same time, the bank maintained its growth forecast for both fiscal 2019 and fiscal 2020 at 0.8 percent.

Overseas economies are generally seeing continued growth, the minutes said, although global financial markets are intermittently seeing periods of instability.

"The Bank will examine the risks considered most relevant to the conduct of monetary policy and make policy adjustments as appropriate," the minutes said.

Also on Tuesday, the central bank said that producer prices in Japan were up 1.3 percent on year in August - exceeding expectations for an increase of 1.1 percent, which would have been unchanged from the July reading.

On a monthly basis, producer prices were unchanged after rising 0.1 percent in the previous month.

Among the individual components, prices were up for advertising services, information and communications and real estate.

Prices were down for architectural services and hotels.

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New Zealand Has NZ$1.484 Billion Trade Deficit

New Zealand had a record merchandise trade deficit of NZ$1.484 billion in August, Statistics New Zealand said on Wednesday - representing 37 percent of exports.

That missed forecasts for a shortfall of NZ$925 million following the revised deficit of NZ$196 million in July (originally -NZ$143 million).

The average monthly deficit in August over the last five years was NZ$1.0 billion. "This month's rise in imports to near record levels occurs at the time of year when exports are typically at a low point," international statistics manager Tehseen Islam said. Exports were up 9.9 percent on year in August to NZ$4.05 billion - missing forecasts for NZ$4.40 billion and down sharply from NZ$5.34 billion in the previous month.

The leading contributor to the rise was meat products and edible offal, up NZ$137 million (43 percent). This increase was led by sheep meat (up NZ$83 million or 55 percent) and beef (up NZ$45 million or 31 percent).

"New Zealand is exporting more beef and lamb, and getting better prices too," Islam said.

Dairy products were up NZ$80 million (17 percent), led by an increase in butter and other milk fats, up NZ$63 million.

Imports jumped an annual 14.0 percent to NZ$5.54 billion versus expectations for NZ$5.50 billion - roughly unchanged from the previous month.

The leading contributor to the imports rise was petroleum and products, up NZ$186 million (50 percent) from last year. This increase was led by crude oil (up NZ$98 million) and diesel (up NZ$73 million).

Imports of crude oil and other petroleum products tend to fluctuate from month to month. The quantity of crude oil imported in August 2018 fell 13 percent from August 2017, but prices rose by about 60 percent.

The latest unit price for crude oil remains 31 percent lower than the most-recent series peak in May 2012. Imports of vehicles, parts, and accessories also rose in August 2018, up NZ$55 million.

Imports of buses, cars, and trucks all had similar contributions to this rise.

The annual trade deficit was NZ$4.8 billion in August 2018, up from NZ$3.1 billion in August 2017.

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