A busy economic calendar puts the EUR and the Dollar in the spotlight. GDP numbers out of Canada will also be watched closely.
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.
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,
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.
The AIG Manufacturing Index increased from 52.5 to 54.0 in February. According to figures released by AIG,
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,
Capital spending rose by 5.7% in the 4th quarter. The rise in spending was significantly higher than a forecasted and 3rd quarter 4.5% increase. According to figures released by the Ministry of Finance,
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.
The Caixin manufacturing PMI rose from 48.3 to 49.9 in February. According to the Markit survey report,
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.
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.
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 2nd 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 2nd Referendum fail.
At the time of writing, the Pound was down by 0.01% at $1.3262.
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.
The focus will shift to 4th 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.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.