Risk appetite continues to support the majors. With the markets not expecting any shift from the RBA, geopolitics and COVID-19 remain curveballs.
It was a busier start to the day on the economic calendar. The Kiwi Dollar and Japanese Yen were in action early this morning. Later this morning, the RBA and Aussie Dollar are also in the spotlight.
Away from the morning stats, the markets responded to U.S ISM Non-manufacturing PMI numbers from Monday.
Continued optimism over an economic recovery amidst spiking new COVID-19 cases weighed on the Greenback.
COVID-19 numbers continued to hit concerning levels, though the markets remained focus on the economic recovery and not news of renewed lockdown measures across the globe.
On Monday, the number of new coronavirus cases rose by 177,554 to 11,713,082. On Sunday, the number of new cases had risen by 156,610. The daily increase was higher than Sunday’s rise and 153,341 new cases from the previous Monday.
Germany, Italy, and Spain reported 1,876 new cases on Monday, which was up from 407 new cases on Sunday. On the previous Monday, 803 new cases had been reported. Notably, Spain reported 1,244 new cases on Monday. This was the highest since 22nd May and follows news of a lockdown within the Catalonia region.
From the U.S, the total number of cases rose by 45,706 to 3,028,861 on Monday. On Sunday, the total number of cases had increased by 47,385. On Monday, 29th June, a total of 41,940 new cases had been reported.
The NZIER Quarterly Survey of Business Survey (QSBO) showed that a net 63% of businesses expect a deterioration in general economic conditions in the 2nd quarter. In the 1st quarter, a net 67% of businesses had expected a deterioration.
The Kiwi Dollar moved from $ to $ upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.14% to $0.6564.
Household spending fell by 0.1% in May, month-on-month, partially reversing a 6.2% decline from April. Economists had forecast a 1.8% increase. Year-on-year, household spending was down by 16.2%, following an 11.1% slide in April. Economists had forecast a 12.2% tumble.
According to the Statistic Bureau,
The Japanese Yen moved from ¥107.357 to ¥107.356 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.04% to ¥107.31 against the U.S Dollar.
At the time of writing, the Aussie Dollar was up by 0.06% to $0.6977, with the markets expecting an RBA hold on policy.
It’s a relatively quiet day ahead on the economic calendar. Key stats include German industrial production figures for May.
Following June’s PMI numbers, there will need to be a pickup in production to support the survey-based data.
Away from the economic calendar, however, expect market risk sentiment to remain the key driver. While news from China was positive on Monday, geopolitics and COVID-19 remain key risks to the current sentiment.
At the time of writing, the EUR was up by 0.10% to $1.1320.
It’s a quiet day ahead on the economic calendar. Housing sector figures for June and 1st quarter labor productivity numbers are due out.
Following news at the start of the week of plans to raise the threshold for stamp duty, June house price figures should have a muted impact. We can also expect 1st quarter labor productivity numbers to also be brushed aside by the Pound.
Expect market risk sentiment, COVID-19, and Brexit chatter to remain key drivers.
At the time of writing, the Pound was up by 0.10% to $1.2505.
It’s a relatively quiet day ahead for the U.S Dollar. Key stats include May’s JOLTs job openings. Expect the markets to be sensitive to today’s figures. While nonfarm payrolls have impressed, the weekly jobless claims continue to raise red flags…
Away from the numbers, chatter from the U.S administration and the latest COVID-19 numbers will also draw attention.
At the time of writing, the Dollar Spot Index was down by 0.05% to 96.676.
It’s a relatively quiet day ahead on the calendar. June’s Ivey PMI is due out later today.
There will be some influence on the Loonie, though geopolitics and COVID-19 will likely be key drivers.
At the time of writing, the Loonie was down by 0.01% to C$1.3541 against the U.S Dollar.
For a look at all of today’s economic events, check out our economic calendar.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.