Markets

A Busy Economic Calendar Puts the EUR, Loonie and Dollar in Focus

Earlier in the Day:

Economic data released through the Asian session this morning was on the heavier side once more. Key stats included February manufacturing figures out of Australia and Inflation and capital spending figures out of Japan. Later in the session, China's Caixin manufacturing PMI was released. Out of New Zealand, January building consent figures were also released in the early hours.

For the Kiwi Dollar,

Building consents jumped by 16.5% in January, year-on-year. The increase comes off the back of a 5.4% rise in December. According to figures released by NZ Stats ,

  • A total of 33,576 new homes were consented to in the year ending January, the highest since 1975.
  • The upside was attributed to a 33% rise in consents for townhouses, flats, and
  • Consents for stand-alone houses increased by just 0.6%.
  • Month-on-month, buildings consents rose by 17%.

The Kiwi Dollar moved from $0.68013 to $0.68073 upon release of the figures. At the time of writing, the Kiwi Dollar was up 0.15% to $0.6817.

For the Aussie Dollar,

The AIG Manufacturing Index increased from 52.5 to 54.0 in February. According to figures released by AIG ,

  • Three of the six sectors expanded, one was stable and two contracted.
  • Positive conditions were reported in export orders, infrastructure, government contracts, defense, and mining projects.
  • On the negative, a slowdown in housing construction was reportedly affecting some sectors.
  • The most notable increases in the sub-indexes included:
    • Employment, which rose by 6.6 points to 53.3; Production, up by 3.9 points to 56.0; and Exports, which rose by 3.1 points to 53.8.

  • Sub-indexes that saw red included:
    • Finished stocks fell by 3.2 points to 51.7; Supplier Deliveries fell by 2.7% to 56.4 and New Orders fell by 0.3 points to 56.0.

The Aussie Dollar moved from $0.70973 to $0.70987 upon release of the figures, which preceded China's manufacturing PMI.

For the Japanese Yen,

Tokyo's core annual inflation rate came in at 1.1% in February. The figures were in line with January, while coming in ahead of a forecasted 1.0%. According to figures released by statistics Japan ,

  • Support for core inflation came from:
    • Fuel, light and water charges, which surged by 7.8%. There were also solid increases in prices for culture and recreation (+2.1%); medical care (+1.2%); clothes and footwear (+1.1%)

  • Weighing on core inflation was a 0.6% fall in prices for transportation and communication.
  • Prices for goods increased by 0.4%, while prices paid for services increased by 0.8%.
  • Month-on-month, consumer prices less fresh food rose by 0.2%.

Capital spending rose by 5.7% in the 4 th quarter. The rise in spending was significantly higher than a forecasted and 3 rd quarter 4.5% increase. According to figures released by the Ministry of Finance ,

  • The manufacturing sector saw investments in plant and equipment rose by 10.9% in the 4 th Non-manufacturing sector investment rose by just 2.7% in the quarter.

The Japanese Yen moved from ¥111.393 to ¥111.431, against the Dollar, upon release of the figures. At the time of writing, the Japanese Yen stood at ¥111.65, down by 0.23% for the session.

Out of China

The Caixin manufacturing PMI rose from 48.3 to 49.9 in February. According to the Markit survey report ,

  • Both output and total new orders saw a slight expansion in February, while export orders fell back into contraction.
  • Capacity pressures increased, with backlogs on the rise, though this may have been attributed to cost-cutting
  • There were declines in both employment and inventories.
  • Confidence for the year ahead eased slightly.
  • On the inflation front, selling prices increased for the first time in 4-months. The increase came in spite of average input prices falling.

The Aussie Dollar moved from $0.70952 to $0.71034 upon release of the figures. At the time of writing, the Aussie Dollar was flat at $0.7094.

The Day Ahead:

For the EUR

It's a particularly busy day ahead on the economic calendar . Key stats through the session include finalized February manufacturing PMI numbers out of France, Germany, and the Eurozone. Spain and Italy's manufacturing PMI numbers are also due out ahead of unemployment numbers out of Germany. Later in the morning prelim, February inflation numbers and January's unemployment are due out of the Eurozone.

Barring any deviation in the Germany manufacturing PMI, we would expect Germany's unemployment figures and the Eurozone's inflation figures to be the key drivers.

Outside of the numbers, market risk sentiment will continue to be a factor, though any pickup in inflationary pressures would continue to support the higher side for the EUR.

At the time of writing, the EUR up by 0.03% at $1.1374.

For the Pound

Economic data scheduled for release is limited to February's manufacturing PMI number. Following a lack of economic indicators throughout the week, we can expect the Pound to be sensitive to today's figures.

Outside the numbers, Brexit will continue to be the market's main area of focus. As the Labour Party looks to table a vote for a 2 nd referendum, there may be a newly found incentive for the coalition government to align on Brexit and Theresa May's deal.

Pressure will be easing on members of parliament to choose a side, with the general view being that an extension will be the most favored path. Such an outcome would likely see Labour's bid for 2 nd Referendum fail.

At the time of writing, the Pound was down by 0.01% at $1.3262.

Across the Pond

It's another busy day ahead on the U.S economic calendar. The session kicks off with the FED's preferred core PCE price index and personal spending figures for December. While both sets of numbers will be key, the focus will likely be on the inflation numbers. The FED's outlook on inflationary pressure has softened, so any uptick could rile the markets.

Later in the session, the focus will shift to the ISM manufacturing PMI numbers for February. Other stats scheduled for release include the Markit survey's finalized manufacturing PMI and consumer sentiment figures. We would expect these stats to have less of an influence on the day.

Outside of the numbers, there's plenty for the markets to consider, including but not limited to trade talk and FOMC member chatter. FOMC member Bostic is scheduled to speak late in the day,

At the time of writing, the Dollar Spot Index was up by 0.08% to 96.236.

For the Loonie

The focus will shift to 4 th quarter GDP numbers due out of Canada this afternoon. With the Bank of Canada scheduled to make its March monetary policy decision next week, the Loonie will likely be particularly sensitive to the numbers. Forecasts are negative for the Loonie.

The Loonie was up by 0.08% to C$1.3162, against the U.S Dollar, at the time of writing.

This article was originally posted on FX Empire

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.