FXTRADING Economic Data Summary (Asia-Pacific | 04/20)

Canadas Construction Cycle Enters an Adjustment Phase

The latest data shows that Canada‘s seasonally adjusted annualized housing starts in March came in at 235,852 units, down 6% from the previous month and below the market expectation of 255,000. From a trend perspective, the six-month moving average also declined, falling 2.9% to 248,378 units, indicating that beyond short-term fluctuations, medium-term momentum is gradually weakening. Overall, elevated financing costs combined with more cautious demand have reduced developers’ willingness to launch new projects.

However, the weakness is not broad-based. In cities with populations over 10,000, actual housing starts remained relatively resilient, rising 10% year-over-year to 16,398 units in March. Cumulative starts for the year reached 49,206 units, up about 9% compared to the same period in 2025. This increase largely reflects a rebound from a low base last year rather than sustained demand expansion. FXTRADING analysis suggests that the annualized housing starts of 235,852 units, down 6% month-on-month, along with the decline in the trend indicator to 248,378, indicates that the real estate market is entering an adjustment phase. Although some cities posted a 10% year-over-year increase and cumulative starts reached 49,206 units, this is more of a low-base recovery, and the overall property cycle remains cautious.

Energy and Services Drive Eurozone Inflation Higher

Eurozone inflation rebounded in March, with headline CPI rising 2.6% year-over-year, significantly accelerating from 1.9% in February and marking a recent high. Behind this shift, the rebound in energy prices and rising service sector costs played a key role. As external uncertainties increase, imported inflation pressures have resurfaced, bringing renewed attention to price dynamics that had previously been easing.

From a structural perspective, services contributed 1.49 percentage points and remained the primary driver of inflation, while energy contributed 0.48 percentage points, and food, alcohol, and tobacco added 0.45 percentage points. In contrast, core inflation edged down slightly from 2.4% to 2.3%, indicating that broader price pressures are not yet out of control. Divergence across regions remains evident, with overall EU inflation at 2.8%, including Romania at 9.0% and Denmark at just 1.0%. FXTRADING analysis suggests that with CPI rising to 2.6% and core inflation easing to 2.3%, current inflation is mainly driven by energy and services. Given significant disparities among member states, the policy path will become increasingly data-dependent.

Fed Beige Book Highlights Rising Cost Pressures

The latest Federal Reserve Beige Book indicates that most regions continue to experience slight to moderate growth, while some areas have stagnated or even seen mild declines. Amid rising uncertainty, businesses have become more cautious in their outlook, showing increased restraint in both hiring and capital expenditure. This shift is less about a sudden drop in demand and more about a forward-looking adjustment in expectations.

On the cost side, rising energy prices have driven up transportation costs and pushed higher prices for downstream products such as plastics and fertilizers. In addition, costs related to metals, technical services, and insurance are also increasing. Many firms report that input costs are rising faster than selling prices, directly squeezing profit margins. FXTRADING analysis suggests that while the U.S. economy remains in a moderate growth range, rising energy and input costs are compressing corporate margins. With input costs increasing faster than sales prices, growth quality is weakening, and business behavior is likely to become more conservative going forward.

Structural Divergence Persists in the UK Economy

The UK economy showed a notable improvement in February, with GDP rising 0.5% month-on-month, well above the market expectation of 0.1%. From an industry perspective, both the services and manufacturing sectors grew by 0.5%, while construction surged by 1.0%, indicating a relatively broad-based recovery.

Looking over a slightly longer horizon, the three-month cumulative growth also reached 0.5%, up from the previous 0.3%. Within this, manufacturing expanded by 1.2%, becoming the main growth driver. However, construction still declined by 2.0% over the three-month period, suggesting that certain sectors remain under pressure. FXTRADING analysis suggests that while the UKs monthly GDP growth of 0.5% and three-month growth of 0.5% indicate a phase of recovery, the 2.0% decline in construction over the same period highlights uneven structural recovery, and future growth may still face volatility risks.