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China Data Disappoints on a Busy Day of Stats and Corporate Earnings

It’s a busy day, with the EUR and USD in the spotlight. It’s also a busy day on the earnings front, which will need to be positive to support risk appetite.
Bob Mason
Currencies Symbols

Earlier in the Day:

It was a relatively busy day on the economic calendar through the Asian session. April private-sector PMI numbers out of China, NZ business confidence figures and Australia’s private sector credit figures were released.

Out of China,

The NBS manufacturing PMI slipped from 50.50 to 50.1 in April, falling short of a forecasted 50.70. The non-manufacturing PMI also eased from 54.8 to 54.3, coming in below a forecasted 55.0.

The Aussie Dollar moved from $0.70671 to $0.70398 upon release of the figures, which preceded private sector credit numbers.

For the Kiwi Dollar,

The ANZ Business Confidence Index rose from -38 to -37.5 in April. According to the latest ANZ Business survey,

  • A net 2% of firms are expecting to lift investment, up by 1 point.
  • Employment intentions increased by 3 points to +4%.
  • Profit expectations rose 1 point to a net 13% expecting profit to decline.
  • A net 35% expect it to be tougher to get credit, improving by 5 points.
  • Firms’ pricing intentions were unchanged at +27%.
  • Inflation expectations stood at 2.04%. A net 47% of firms expect higher costs, led by agriculture and retail.

The Kiwi Dollar moved from $0.66815 to $0.6660 upon release of the figures. At the time of writing, Kiwi Dollar was down 0.02% to $0.6665.

For the Aussie Dollar,

Private sector credit rose by 0.3% in March, which was in line with forecasts and a 0.3% rise in February.

According to figures released by RBA,

  • Housing credit rose by 0.2%, month-on-month, easing from a 0.3% increase in February.
  • Personal credit fell by 0.3%, following on from a 0.1% decline in February.
  • Business credit rose by 0.5%, up from a 0.3% increase in February.
  • Year-on-year, total credit rose by 3.9%, easing back from a 5.0% rise in March 2018.
  • Housing credit rose by 4.0%, down from a 6.1% rise in March 2018.
  • Personal credit slid by 2.8%, following a 1.1% fall in March 2018.
  • Business credit rose by 4.9%, picking up from a 4.0% rise in March 2018.

The Aussie Dollar moved from $0.70416 to $0.70441 upon release of the figures. At the time of writing, the Aussie Dollar was down 0.10% to $0.7049.

Elsewhere,

With the Japanese markets closed for the week, risk sentiment continued to provide direction for the Yen. At the time of writing, the Japanese Yen was up by 0.04% to ¥111.61 against the U.S Dollar, with support coming from the weaker stats out of China.

The Day Ahead:

For the EUR

Key stats include 1st quarter GDP numbers for France and the Eurozone and German unemployment and consumer sentiment figures due out later this morning. French consumer spending numbers will also need to be watched. The EUR has been particularly sensitive to consumer confidence figures of late.

Finalized inflation numbers out of Italy and Germany will likely have a muted impact on the EUR.

Ahead of the numbers, manufacturing PMI figures out of China set the tone in the early part of the day.

At the time of writing, the EUR was up 0.03% at $1.1189.

For the Pound

It’s another quiet day on the economic calendar, with no material stats scheduled for release.

The focus will continue to be on Brexit. Positive updates from both sides of cross-party talks would have led to expectations of a near-term solution to the Brexit puzzle.

At the time of writing, the Pound was up 0.02% to $1.2940.

Across the Pond

Chicago PMI, consumer confidence and pending home sales and house price figures are due out of the U.S this afternoon.

On the data front, the focus will be on April’s consumer confidence figures. While retail sales figures have improved, consumption slumped in the 1st quarter. Any weakness will likely weigh heavily, though much will depend on updates from trade talks that resumed this morning.

Outside of the stats, U.S corporate earnings will also be in focus. Key earnings results include those for Apple Inc., General Electric Co., General Motors Co., McDonalds Corp., and Pfizer Inc.

At the time of writing, the Dollar Spot Index was down by 0.04% to 97.818.

For the Loonie

The Loonie will be in action later this afternoon with GDP and RMPI figures to provide direction. The numbers will need to impress, however, to give the Loonie any chance of a rebound from last week’s reversal.

Private sector PMI numbers out of China weighed on appetite for riskier assets in the earlier part of the day.

The Loonie was down by 0.04% at C$1.3463, against the U.S Dollar, at the time of writing, with a fall in crude oil prices also contributing to the downside.

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