Earnings and Economic Data to Dictate Risk Appetite Today
Earlier in the Day:
The economic calendar was on the quieter side again through the Asian session this morning.
Key stats due out later this morning are limited to Tertiary Industry Activity Index numbers out of Japan. Outside of the numbers, the RBA released its monetary policy meeting minutes from 2nd April.
Disappointing earnings results from Goldman Sachs and Citigroup was an early blip in the earnings season. The weaker than expected numbers failed to pin back the bulls, however.
For the Aussie Dollar,
The RBA released its meeting minutes this morning. Salient points from the minutes included:
- Recent retail sales data and contacts in the Bank’s liaison program suggest that growth in housing-related consumption had remained soft in recent months.
- Growth in household disposable incomes had been subdued for a number of years, in spite of continued employment growth and rise in average hourly earnings.
- The housing sector continues to be an area of uncertainty.
- Further growth in non-mining business investment is anticipated following a strong 4th
- The labor market had continued to improve in early 2019, leading to the unemployment rate falling to 4.9%.
- Members noted that inflation was likely to remain low for some time.
- With wage growth remaining low, there continued to be strong competition in the retail sector and governments looked to ease the cost of living pressures.
- Members agreed that the chances of a rate hike in this environment were low near-term.
The Aussie Dollar moved from $0.71642 to $0.71530 upon release of the minutes. At the time of writing, the Aussie Dollar was down 0.38% to $0.7146.
For the Japanese Yen,
Moves in the Tertiary Industry Activity Index in February will provide direction to the Yen later this morning. Forecasts are for a 0.2% decline. The index rose by 0.4% in January, which had broken a downward trend since a 2.2% increase in October. The figures will be released by the Ministry of Economy, Trade and Industry.
At the time of writing, the Japanese Yen was up 0.04% to ¥111.99 against the U.S Dollar.
At the time of writing, the Kiwi Dollar was down 0.16% to $0.6752 for the session.
In the equity markets,
The ASX200 led the way, up by 0.38% at the time of writing. Elsewhere, the Nikkei was up by 0.18%, with the Hang Seng and CSI300 up by 0.09% and 0.029% respectively.
The Day Ahead:
For the EUR,
After a quiet start to the week, April’s economic sentiment figures for Germany and the Eurozone are due out later this morning.
The key driver is Germany’s ZEW Economic Sentiment figure, though expect the Eurozone number to also have an impact. Forecasts are EUR positive.
Following a spate of weak economic indicators, the markets are in search of a turnaround…
Outside of the numbers, expect corporate earnings to continue to influence risk sentiment ahead of some high impact stats due out tomorrow.
At the time of writing, the EUR was down 0.01% at $1.1303.
For the Pound,
Following a quiet Monday that provided the Pound with some much-needed upside, it’s a busier day on the economic calendar.
February wage growth and unemployment figures are due out alongside March claimant count numbers this morning.
Forecasts are for a pickup in wage growth and a smaller than February increase in claimant counts that are both Pound positive.
At the time of writing, the Pound was down 0.05% to $1.3093.
Across the Pond,
It’s another relatively quiet day on the economic calendar. March industrial production figures are due out of the U.S this afternoon.
While forecasts are for a 0.2% increase in production, month-on-month, in March, the Dollar will need more to find support.
Outside of the stats, expect today’s key earnings to influence risk sentiment through the day. Bank of America and Netflix Inc. are due to release quarterly earnings today. Of interest will be Netflix Inc.’s earnings outlook as Disney makes progress on competing against its platform.
At the time of writing, the Dollar Spot Index was up by 0.01% to 96.955.
For the Loonie,
It’s a busier day ahead on the economic calendar. February foreign securities purchases and manufacturing sales figures are due out this afternoon.
While the Loonie will likely respond to the manufacturing sales figures, market risk sentiment will remain the key driver through the day. China will release 1st quarter GDP and March industrial production figures tomorrow that will likely set the tone for the remainder of the week.
The Loonie was down 0.11% at C$1.3382, against the U.S Dollar, at the time of writing.