MARKET MOVER - BNP PARIBAS - Investment Services India

Key Data Preview
Chart 3: US ISM Points to Moderation
Source: Reuters EcoWin Pro
BNP Paribas Forecast: Mixed Report
US: Durable Goods (August)
Release Date: Friday 24 September
Durable goods orders are expected to fall 1.7% in August,
after a 0.4% increase in July, reflecting a sharp drop in
Boeing orders. Excluding transportation, we look for a
modest 0.9% rebound after a sharp 3.7% decline in July.
Orders for durable goods appear to be slowing as the
inventory cycle runs its course and global trade cools. The
new orders component of the ISM manufacturing index has
declined for three consecutive months, pointing to a
noticeable slowing (see chart). Our forecast would be
consistent with a solid but smaller contribution to GDP from
business investment in Q3.
% m/m Aug (f) Jul Jun May
Durable Goods -1.7 0.4 -0.2 -0.7
Ex-Transport 0.9 -3.7 0.2 1.4
Key Point:
The negative headline reading we expect would be
driven by a sharp decline in Boeing orders; extransport
should post a modest gain.
Chart 4: Japan: Trade Balance (JPY bn, sa)
1400
1200
1000
800
600
400
200
0
-200
-400
-600
-800
00 01 02 03 04 05 06 07 08 09 10
Source: MOF, BNP Paribas
JPY bn Aug (f) Jul Jun May
Trade balance (nsa) 347.0 802.0 682.2 316.0
Trade balance (sa) 541.3 610.4 514.5 345.8
BNP Paribas: Slightly Smaller Surplus
Japan: Trade Data (August)
Release Date: Monday 27 September
Based on trade data through mid-August, we expect
nominal exports in the month as a whole to have declined
more sharply than nominal imports, with the result that the
seasonally adjusted trade surplus should modestly shrink.
Owing to the yen’s appreciation (which causes yen-based
prices to decline for imports and exports), nominal exports
have declined for three straight months and imports have
declined for two. On the other hand, real exports (adjusted
for exchange rate and price fluctuations) continue to trend
higher, led by shipments to Asia. In August, though, there
could be a momentary lull as real exports could contract
slightly (real imports should slightly expand). While the
yen’s dramatic appreciation has not damaged export
volume (real exports) so far, the pace of real export growth
is no longer as robust as before, owing to the fading impact
of overseas inventory restocking and fiscal stimulus.
Key Point:
We expect nominal exports to have declined more
sharply than nominal imports, with the result that the
seasonally adjusted trade surplus should modestly
shrink.
Market Economics 23 September 2010
Market Mover
www.GlobalMarkets.bnpparibas.com
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