FXEMPIRE
All

Coronavirus Jitters Surface as the Focus Shifts to Employment Numbers and the GBP

More stats due out of the UK could test the Pound further this afternoon. Earlier in the day, the BoJ held rates steady.
Bob Mason
Silvanute

Earlier in the Day:

It was a relatively quiet day on the Asian economic calendar this morning. There were no material stats to provide direction through the session.

The lack of stats left the majors to take their cues from Monday’s European session and the futures markets.

On the monetary policy front, the BoJ delivered its first monetary policy decision of the year.

While the BoJ was in focus, it was risk-off earlier in the day. News of the Coronavirus killing a 4th and landing on the doorstep of HK sounded the alarm bells.

For the Japanese Yen

The Bank of Japan held rates unchanged this morning, in spite of some particularly disappointing household spending and private sector PMI numbers of late.

Last week, the BoJ Governor had talked of the Bank’s willingness to provide further support should the need arise.

Looking at the quarterly outlook report, released alongside the policy decision

  • Japan’s economy is likely to continue on an expanding trend through to 2021.
  • The Bank expects that the impact of a slowdown in overseas economies on domestic demand will be limited.
  • Expectations are for exports to moderately increase.
  • Domestic demand is expected to follow an upward trend, though this has declined recently due to the effects of the consumption tax hike and natural disasters.
  • The annual rate of core inflation is likely to gradually increase towards 2%.
  • The Bank has revised upwards projected growth rates, mainly for the fiscal year 2020, reflecting the effect of the government’s economic measures.
  • Risks to economic activity are skewed to the downside, particularly regarding developments in overseas economies.
  • The risk to prices is also skewed to the downside.

The Japanese Yen moved from ¥109.974 to ¥109.952 upon the decision and release of the outlook report. At the time of writing, the Japanese Yen was up by 0.18% to ¥109.98 against the greenback

Elsewhere

At the time of writing, the Aussie Dollar was down by 0.12% to $0.6865, with the Kiwi Dollar down by 0.03% to $0.6606.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar, with ZEW economic sentiment figures for Germany and the Eurozone due out.

With the ECB expecting sentiment and the economy to have bottomed out, the sentiment figures will need to mirror the ECB’s view to support the EUR.

Forecasts are mixed, however, with the sentiment in Germany expected to improve and sentiment in the Eurozone to deteriorate.

At the time of writing, the EUR was up by 0.02% to $1.1097.

For the Pound

It’s a busy day ahead on the economic calendar, with employment and wage growth figures due this afternoon.

While the unemployment rate will garner attention, the focus will be on the claimant count and average earnings numbers.

Another set of disappointing figures will likely pave the way for the BoE to cut rates on Thursday.

On the Brexit front, the countdown continues, with 10-days remaining until Britain leaves the EU.

At the time of writing, the Pound was down by 0.02% to $1.3008.

Across the Pond

It’s another quiet day on the data front, with no material stats due out of the U.S to provide direction.

Following Monday’s close, we expect the markets to look ahead to key stats later in the week. Sentiment towards the U.S economy has vastly improved since the 3rd quarter, so downside for the Dollar should be limited.

The Dollar Spot Index was down by 0.04% to 97.566 at the time of writing.

For the Loonie

It’s also a relatively quiet day on the economic calendar, with Nov manufacturing sales figures due out later today.

With the BoC in action tomorrow, we can expect some Loonie sensitivity to the numbers. Expect oil prices to also influence.

The Loonie was down by 0.06% at C$1.3056 against the U.S Dollar, at the time of writing.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US