Front Page Editor, Asia
Richard's Feed
Oct 28, 2011

Asian stocks rally, euro takes a breather

By Richard Pullin

(Reuters) – Asian stocks headed for their best week in nearly three years after a long-awaited plan to resolve the European debt crisis sparked a huge relief rally in riskier assets, while the euro took a breather after jumping to a seven-week high.

European shares were set to extend the previous session’s sharp rally, with financial spreadbetters seeing gains of as much as 1 percent in Germany’s DAX .GDAXI, 0.7 percent in France’s CAC-40 .FCHI and 0.3 percent in Britain’s FTSE 100 .FTSE.

Sep 1, 2011

European shares seen mixed, eyes on data

MELBOURNE, Sept 1 (Reuters) – Asian stocks rose to a
one-month high on Thursday, but pared gains late in the session
on signals that European markets would not open firmly up on an
uncertain global growth outlook that led Brazil to unexpectedly
slash interest rates.

U.S. stocks futures SPc1 were up just 0.15 percent in late
Asian trade, suggesting market caution ahead of the
manufacturing and jobs data which may give clues as to whether
the U.S. Federal Reserve will step in to support the economy.

Sep 1, 2011

Asia stocks gain on Fed hopes, China PMI firms

MELBOURNE (Reuters) – Asian stocks pushed higher in early trade on Thursday in line with a firmer tone on Wall Street, extending a recovery from a sharp sell-off in August on hopes the U.S. Federal Reserve will intervene in markets to support the economy.

Global markets have gained strength in recent days, rebounding from several weeks of losses that saw Asian stocks post their worst month in August since May last year, despite concerns about a slowdown in the pace of global growth.

May 11, 2011

Commodities recovery boosts Asian markets

MELBOURNE (Reuters) – Asian shares firmed on Wednesday as rising global commodity prices boosted energy and resource stocks, while investors largely shrugged off data from China suggesting growth there is starting to slow.

Oil prices and the euro dipped briefly after China’s April inflation came in slightly above expectations, but other data, including industrial output, suggested slower activity and less room for aggressive tightening to curb growth.

May 11, 2011

Asian markets firmer on commodity rebound

MELBOURNE (Reuters) – Asian shares firmed on Wednesday on rising commodity prices which boosted energy and resource stocks, as investors largely shrugged off slightly stronger-than-expected inflation data from China.

Oil prices dipped briefly on concerns about weaker Chinese demand, but the broader commodity price recovery after steep falls last week and easing concerns about a possible restructure of Greek debt kept markets in positive territory in line with gains in the U.S. and Europe.

May 11, 2011

Asian shares rise; eyes on China inflation data

MELBOURNE, May 11 (Reuters) – Asian shares pushed higher in
line with gains in world markets as Chinese trade data buoyed
optimism about the global recovery, but investors will be
watching China’s inflation data due later on Wednesday for any
hints on further tightening.

U.S. stocks rose for a third day in a row, led by utilities
and other defensive sectors, while European shares climbed to a
one-week closing high as investor concerns over a possible Greek
debt restructuring receded.

May 10, 2011

Oil retreats on margin hike; euro slips vs yen

MELBOURNE, May 10 (Reuters) – Oil prices slid after a 25
percent hike in trading margins for U.S. crude spread caution
among traders about volatile commodity prices, while Greek woes
pulled the euro down to a six-week low against the yen on

A sharp drop in silver prices last week triggered a broader
pullback in raw materials that had a domino effect on other
risky assets such as emerging market equities, as some investors
slashed big positions and went to the sideline.

Aug 27, 2009
via MacroScope

Ranking economic forecasts


Financial journalists spend a lot of time surveying market economists ahead of macro-economic data releases to find out how they think the next CPI or GDP number is going to turn out. A poll 20 or 30 economists gives a market median forecast, which will determine how traders react when the data comes out. If the figure beats expectations and points to a strong economy and likely rate rises, the currency will jump, and vice versa.But how good are these forecasts? Why react if there’s no track record for accuracy? Economists have a pretty good feel for how reliable forecasts are for different indicators, but it would easier to have a number that tells us how reliable forecasts are for data such as GDP, jobs data or the CPI?Forecast accuracy is a live topic in academic journals. There’s the MAE and the MSE, the sMAPE and the MAD/Mean ratio among others. Some measures depend on scale so they can’t be used to compare different series of data, such as GDP and the jobless rate. Using percentage error — the MAPE — can overcome this but it gives whacky results with outcomes of zero or near zero. One possible solution is to use the mean absolute scaled error – or MASE – suggested by Professor Rob Hyndman at Australia’s Monash University and colleague Anne Koehler from Miami University, Ohio in 2006.The MASE measures how forecasters have performed against a so-called naïve forecast — simply forecasting that next month’s result will be the same as last month’s. The lower the result, the better the forecast. So 0 is a perfect forecast, while a score above 1 means the forecast is worse than a naïve forecast.Applying the test to some Japanese economic indicators, we can rank forecasts of the different data series according to how much better they are than a naïve forecast. So from best to worst:Industrial output Score 0.25 – Economists are very good at forecasting industrial production, which measures the output of items such as flat-screen TVs, automobiles and electric machinery. Apart from manufacturer’s own forecasts, economists can monitor export data, electricity usage and steel and auto output figures for clues.CPI Score 0.29 – Deflation has been accelerating due to falling oil costs and weak domestic demand. National CPI tends to track Tokyo CPI, which is released a month in advance and forms the basis for forecast numbers.Machinery orders Score 0.43 – Core machinery orders is a highly volatile series, which is seen as an indicator of capital spending in the coming six to nine months. Analysts are actually pretty good at forecasting its ups and downs, if not at getting the exact levels.Household spending Score 0.78 – Household spending is a measure of consumption, which has recently been affected by the government’s one-time payouts to households. Economists track retailers’ sales figure, but the result is fairly poor.

Jun 2, 2009
via MacroScope

How good are economists at forecasting CPI?


Market economists are taking a pasting worldwide for not predicting the global financial crisis. But how good is the profession at more bread-and-butter tasks, such as forecasting economic data?


In Australia, Reuters surveys 15-25 economists ahead of each quarterly CPI figure. A check back over analyst forecasts for the past 17 years shows:

    • About Richard

      "I'm currently the Asian editor for the Front Page, which appears on Reuters terminals, and was formerly the Bureau Chief for Australia and New Zealand."
    • Follow Richard