April PMIs, Brexit Talks, an EU Summit, and COVID-19 to Keep the Markets Busy

Earlier in the Day:

It was a relatively busy start to the day on the economic calendar this morning. April prelim private sector PMI numbers for Japan were in focus early on.

Outside of the numbers, crude oil prices and updated coronavirus numbers continued to influence.

On Wednesday, the number of new coronavirus cases rose by 78,442 to 2,634,918. This was up marginally from a 75,450 increase on Tuesday.

France, Germany, Italy, and Spain reported 11,603 new cases on Wednesday, which was up from 10,752 new cases on Tuesday. The numbers continued to support the downward trend seen from last week, however.

From the U.S, the total number of cases rose by 29,760 to 848,504. On Tuesday, the total number of cases had risen by 25,985.

The Key take away from the numbers was the marginal pickup across the 4 EU member states and the U.S supporting the plans to ease lockdown measures. Compared with last week, the downward trend continued.

For the Japanese Yen

According to prelim figures, Japan’s Manufacturing PMI fell from 44.2 to 43.7 in April, with the services PMI tumbling from 33.8 to 22.9.

Key points from the prelim Markit Survey’s included:

• In the manufacturing sector, business conditions deteriorated at the sharpest pace since Aril 2009.
• Output fell at the sharpest pace in 9-years, with new work collapsing.
• In the services sector, April saw the largest contraction since records began back in 2007.

The Japanese Yen moved from ¥107.812 to ¥107.777 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.04% to ¥107.79 against the U.S Dollar.

Elsewhere

At the time of writing, the Aussie Dollar was down by 0.33% to $0.6302, with the Kiwi Dollar was down by 0.37% to $0.5929.

Private sector PMIs out of Australia, which tend to have a limited impact, weighed early on. The services PMI tumbled from 38.5 to 19.6, while the Manufacturing PMI fell from 49.7 to 45.6.

The Day Ahead:

For the EUR

It’s a particularly busy day ahead on the economic calendar. Economic data includes prelim April private sector PMIs for France, Germany, and the Eurozone. German consumer confidence figures for May will also be in focus.

Expect the Eurozone’s composite to garner plenty of attention. With the EU in lockdown mode in April, however, the PMIs are likely to be weaker than those seen in March…

Outside of the numbers, COVID-19 numbers, crude oil prices and any chatter from Brussels will also be in focus. The EU Summit will garner plenty of interest as the markets look for EU ministers to deliver more aid.

As Germany eases lockdown measures, the markets will now need to wait for a few weeks to see whether the number of new coronavirus cases spikes or continues on the downward trend.

At the time of writing, the EUR was down by 0.08% to $1.0814.

For the Pound

It’s also a busy day ahead on the economic calendar. Prelim April private sector PMIs and CBI Industrial Trend Orders for April are due out later today.

While the markets are expecting some quite dire numbers, it’s more about how bad. Sub-20 PMIs would add further pressure on the Pound, with the Eurozone’s private sector expected to see sub-40.

Industrial trend orders will likely have less of an impact on the day.

Outside of the numbers, expect the UK’s latest coronavirus numbers and market risk sentiment to also influence. There are also updates from the resumption of Brexit talks to consider later in the day.

At the time of writing, the Pound was down by 0.10% to $1.2322.

Across the Pond

It’s a busy day ahead on the U.S economic calendar. Prelim April private sector PMIs, the weekly jobless claims and new home sales figures for March are due out.

Expect the initial jobless claims and April Services PMI to garner the greatest interest.

As ever, outside of the numbers, news updates on COVID-19 and chatter from Capitol Hill will also be in focus.

The markets will also need to keep one eye on crude oil prices. A further contraction in private sector PMIs could add further pressure on crude.

The Dollar Spot Index was up by 0.04% to 100.431 at the time of writing.

For the Loonie

It’s a quiet day ahead on the economic calendar, with no material stats due out to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of crude oil prices and market risk sentiment. Expect the PMI numbers and COVID-19 updates to be the key drivers on the day.

The Loonie was down by 0.16% to C$1.4183 against the U.S Dollar, at the time of writing.