China’s Economy Holds Steady as Focus Shifts to the GBP and the USDUK retail sales figures and a busy U.S calendar put the GBP and USD in focus.
Earlier in the Day:
It was a busy day on the Asian economic calendar this morning. Stats included Business PMI numbers for New Zealand and 4th quarter GDP and December industrial production numbers out of China.
While the numbers provided direction, particularly the stats out of China, the talk of tariffs being removed in stages over the year added support early on.
For the Kiwi Dollar
The Business NZ PMI fell from 51.4 to 49.3 in December, which followed on from a fall from 52.6 to 51.4 in November.
The Kiwi Dollar moved from $0.66402 to $0.66335 upon release of the figures. At the time of writing, the Kiwi Dollar up by 0.02% to $0.6639.
Out of China
Fixed asset investments rose by 5.4%, year-on-year, in December, picking up from a 5.2% increase in November. Economists had forecast a 5.2% increase.
Industrial production rose by 6.9%, year-on-year, in December, coming in ahead of a forecasted 5.9% increase. In November industrial production had risen by 6.2%.
Retail sales increased by 8% in December, which was in line with November numbers, while ahead of a forecasted 7.8% rise.
Year-on-year, the economy grew by 6.0% which was in line with forecasts. The economy had grown by 6.0% in the 3rd quarter. Quarter-on-quarter, the economy grew by 1.5%, which was also in line with forecasts and the 3rd quarter.
The Aussie Dollar moved from $0.68924 to $0.68993 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.06% to $0.6902.
At the time of writing, the Japanese Yen was down by 0.04% to ¥110.20 against the greenback.
The Day Ahead:
For the EUR
It’s a relatively quiet day ahead on the economic calendar, with finalized inflation figures for December due out of Italy and the Eurozone.
Barring deviation from prelim, the Eurozone’s month-on-month figures will likely have the greatest influence.
Outside of the numbers, we can expect sentiment towards trade to also provide direction on the day.
When looking at the economic indicators from the U.S and the Eurozone and factoring in the phase 1 trade agreement, the upside for the EUR will likely be limited.
At the time of writing, the EUR was up by 0.01% to $1.1138.
For the Pound
It’s a relatively busy day ahead on the economic calendar, with December retail sales figures due out of the UK.
Economic data from earlier in the week had been particularly disappointing yet the Pound has managed to hold its ground. Boris Johnson’s victory and an improved political environment continue to prop up the Pound.
Forecasts are Sterling positive.
At the time of writing, the Pound was down by 0.09% to $1.3068.
Across the Pond
It’s another busy day on the data front. Key stats include December’s industrial production and housing sector figures and January consumer sentiment numbers.
Following December’s disappointing NFP numbers, November’s JOLTs job opening figures will also have an influence on the day.
On the geopolitical front, with the phase 1 trade agreement out of the way, impeachment chatter has picked up. The impeachment trial began on Thursday and is expected to hit full speed next week.
While we can expect plenty of news, the fact that Trump is unlikely to be ousted by his own party leaves the markets in a calm state.
The Dollar Spot Index was down by 0.01% to 97.307 at the time of writing.
For the Loonie
It’s another quiet day on the economic calendar, with economic data limited to November foreign securities purchases.
With the Bank of Canada’s first monetary policy decision due next week, there’s been little to influence in the week.
The USMCA and a phase 1 trade agreement between the U.S and China should be enough to provide support on the day.
From earlier in the day, economic data out of China should also provide support, with GDP numbers holding steady and industrial production on the bounce.
The Loonie was down by 0.01% at C$1.3043 against the U.S Dollar, at the time of writing.