Economic Data and Brexit Keep the EUR and the Pound in the Spotlight

Earlier in the Day:

It’s was a busy start to the week on the economic calendar this morning. The Japanese Yen, the British Pound, and the Aussie Dollar were in action.

For the Japanese Yen

Household spending and finalized 3^rd quarter GDP numbers were in focus in the early hours.

In October, household spending rose by 2.1%, month-on-month, following a 3.8% jump in September. Year-on-year, household spending increased by 1.9%, following a 10.2% slump in September. Economists had forecast increases of 1.0% and 2.5% respectively.

According to the Statistic Bureau,

• Spending on furniture & household utensils surged by 39.7%.
• There were also sizeable increases in spending on medical care (+15.9%), housing (+13.4%), and education (+10.6%).
• Spending on fuel, light, & water charges (+7.4%), clothing & footwear (+3.7%), and food (+1.9%) were also on the rise.
• A 12.4% slide in spending on other consumption expenditures and a 3.0% decline in transportation & communication were the only negatives.

The Japanese Yen moved from ¥103.984 to ¥104.005 upon release of the figures that preceded finalized GDP numbers.

In the 3^rd quarter, the economy expanded by 5.0%, which was in line with the 1^st estimate. Year-on-year, the economy grew by 22.9%, coming in ahead of the 1^st estimate of 21.4%.

The Japanese Yen moved from ¥104.011 to ¥103.970 upon release of the figures. At the time of writing, the Japanese Yen was flat at ¥104.05 against the U.S Dollar.

For the Aussie Dollar

House prices rose by 0.8% in the 3^rd quarter, following a 1.8% decline in the 2^nd quarter. Economists had forecast a 1% fall.

In November, the NAB Business Confidence Index increased from 5.00 to 12.0 in November.

According to the November survey,

• The Business Conditions Index rose by 7 points to +9 index points in November.
• Trading and profitability delivered the upside in conditions, with both rising by 10 points.
• Lagging the improvement in activity measures as the employment index, which remained unchanged at -5 points.
• The exports sub-index also remained unchanged at -4, while the forward orders sub-index rose from -3 to +6.

The Aussie Dollar moved from $0.74122 to $0.74160 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.03% to $0.7419.

Elsewhere

At the time of writing, the Kiwi Dollar down by 0.13% to $0.7035.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. ZEW Economic Sentiment figures for Germany and the Eurozone are due out for December.

Germany’s sentiment figures will likely have the greatest impact on the EUR.

French nonfarm payroll figures and finalized 3^rd quarter GDP numbers for the Eurozone are also due out.  We would expect the numbers to have a muted impact on the EUR, however.

Away from the economic calendar, Brexit news updates and chatter from Capitol Hill will also continue to influence.

At the time of writing, the EUR was up by 0.01% to $1.2110.

For the Pound

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

The lack of stats will continue to leave the Pound in the hands of Brexit updates. It will be all eyes on Brussels as the British PM and EU President attempt to break the deadlock.

Earlier in the day, the BRC Retail Sales Monitor showed a 7.7% rise in sales, year-on-year, in November. In October, sales had risen by 5.2%. The impact on the Pound was muted, however, with Brexit in focus.

At the time of writing, the Pound was down by 0.14% to $1.3361.

Across the Pond

It’s a relatively quiet day ahead on the economic calendar. 3^rd quarter nonfarm productivity and unit labor costs are due out.

Expect the numbers to have a muted impact on the Greenback and market risk sentiment, however.

The markets have moved on from the 3^rd quarter. Progress towards a COVID-19 stimulus package and COVID-19 vaccine updates will remain the key drivers.

From the EU, any breakdown in Brexit talks would support demand for the U.S Dollar, however.

At the time of writing, the Dollar Spot Index was up by 0.10% to 90.879.

For the Loonie

It’s a quiet day on the economic data front. There are no material stats due out of Canada ahead of tomorrow’s Bank of Canada monetary policy decision.

The lack of stats will leave the Loonie in the hands of COVID-19 news and chatter from Capitol Hill.

At the time of writing, the Loonie was up by 0.02% to C$1.2795 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.