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Bob Mason
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Earlier in the Day:

It was a busy day on the economic calendar this morning. The Aussie Dollar, Kiwi Dollar, and Japanese Yen were in action through the Asian session.

There were also the latest coronavirus numbers for the markets to consider.

At the time of writing, the total number of U.S cases stood at 163,479. For Italy, Spain, Germany, and France, the combined number of cases stood at 301,130. The total global number of cases rose to 784,381.

For the Kiwi Dollar

February building consents and March business confidence figures were in focus.

In February, building consents rose by 4.7%, reversing a 2% slide from January. Economists had forecast a 1% rise.

The Kiwi Dollar moved from $0.60103 to $0.60087 upon release of the figures that preceded the business confidence figures.

In March, the ANZ Business Confidence Index fell from -19.4 to 63.5. Economists had forecast a fall to -24.1.

According to the latest ANZ Report,

  • A net 27% of firms expect weaker economic activity in their own business, down by 39 points to a record low.
  • Retail sector own activity slumped 56 points to -41, with both services and construction seeing more than 40 point drops.
  • Employment intentions fell 24 points to a net 23% of firms intending to reduce employment.
  • Investment intentions fell 21 points to a negative 14%.
  • Profit expectations fell 29 points to a net 37% expecting lower profitability.
  • Export intentions fell 24 points to -26.

The Kiwi Dollar moved from $0.60087 to $0.60148 upon release of the figures. At the time of writing, the Kiwi Dollar was flat at $0.6011.

For the Japanese Yen

Industrial production and retail sales figures for February were in focus early in the day.

According to the Ministry of Economy, Trade, and Industry, retail sales jumped by 1.7% in February, year-on-year, reversing a 0.4% fall in January. Economists had forecast a 1.2% decline.

Industrial production increased by 0.40% in February, according to prelim figures, following a 1.0% rise in January. Economists had forecast a 0.1% rise.

According to the Ministry of Economy, Trade, and Industry,

Industries that mainly contributed to the increase were:

  • Electronic parts and devices.
  • Inorganic and organic chemicals.
  • Iron, steel, and non-ferrous metals.

Industries that mainly contributed to a decrease were

  • Motor vehicles
  • Transport equipment (excl. motor vehicles).
  • Production machinery.

Forecasts for industrial production continued to point to a slide in March, however, while positive for April.

For March, industrial production is forecasted to fall by 5.3% and then rise by 7.5% in April.

The Japanese Yen moved from ¥108.104 to ¥108.066 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.71% to ¥108.53 against the U.S Dollar.

For the Aussie Dollar

February new home sales and private sector credit figures were in focus ahead of March private sector PMIs out of China.

In February, new home sales jumped by 6.2%, following a 5.7% rise in January. Economists had forecast a 1.9% decline.

The Aussie Dollar moved from 0.61647 to $0.61699 upon release of the figures.

Private sector credit numbers were also positive. According to figures released by RBA, total credit increased by 0.4%, month-on-month, in February. In January, credit had risen by 0.3%.

  • Business credit rose 0.9%, following a 0.6% increase in January, with housing credit seeing another 0.3% gain.
  • Personal credit continued to decline, however, falling by 0.5% following a 0.6% slide in January.

The Aussie Dollar moved from $0.61785 to $0.61882 upon release of the RBA’s figures that preceded March PMI numbers out of China.

At the time of writing, the Aussie Dollar was down by 0.23% to $0.6160.

Out of China

March private sector PMIs provided much-needed relief. According to the National Bureau of Statistics:

  • The March Composite jumped from 28.9 to 53.0, with the Manufacturing PMI rising from 35.7 to 52.0. Economists had forecast a rise to 45.0.
  • Non-Manufacturing sector activity also rebounded, with the PMI rising from 29.6 to 52.3.

The Aussie Dollar moved from $0.61489 to $0.61582 upon release of the figures.

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The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Key stats March unemployment numbers out of Germany and the Eurozone’s prelim March inflation figures.

French consumer spending figures for February, 4th quarter GDP numbers out of Spain and prelim March inflation figures out of Italy should have a muted impact on the day.

Expect German unemployment figures to have the greatest influence on the day, with the markets prepped for softer inflationary pressures.

When considering Germany’s unemployment numbers, the markets will also need to assume that worse is yet to come.

Outside of the stats, the latest updates on the coronavirus numbers will also provide direction. A smaller increase in the number of new cases would provide support to the EUR.

At the time of writing, the EUR was down by 0.32% at $1.1013.

For the Pound

It’s a relatively busy day ahead on the economic calendar. Finalized 4th quarter GDP and business investment numbers will likely have a muted impact on the Pound, however. The BoE and the government have already made their moves and the markets should now be looking forward and not back to the 4th quarter.

Outside of the numbers, the number of new cases in the UK would need to be on the lower side, however, for the Pound to find support.

Updates from Brexit talks will also be in focus on the day. A failure to find common ground will raise the Brexit stress levels…

At the time of writing, the Pound was down by 0.71% to $1.2326.

Across the Pond

It’s a relatively quiet day ahead on the U.S economic calendar. March consumer confidence figures will grab the limelight later today.

With weak numbers expected, there should be some resilience to the figures. The markets are all too aware of the shutdown in the U.S and surge in jobless claims. This is undoubtedly going to be reflected in the confidence figures.

January house price figures and Chicago PMI numbers for March will likely have a muted impact on the Dollar…

While the markets will consider the numbers, we will need to digests April and May figures now to get a sense of how extended the economic meltdown will be…

Trump’s decision to hold back from easing containment measures until the end of April suggests more doom and gloom ahead.

The Dollar Spot Index was up by 0.31% to 99.489 at the time of writing.

For the Loonie

It’s a quiet day ahead on the economic calendar, with January GDP and February RMPI numbers unlikely to provide any direction.

The Loonie will remain in the hands of the global financial markets and risk sentiment over the course of the day.

While the BoC has made its near-term moves, a lot now depends upon government success at containing the virus…

The Loonie was down by 0.25% at C$1.4201 against the U.S Dollar, at the time of writing.

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