Economic Data and the UK Parliament Put the GBP, EUR and USD in Focus

It’s a busy day ahead, with trade chatter supporting risk appetite ahead of the stats. UK politics will also be in focus later today…
Bob Mason
Parliament

Earlier in the Day:

It was a relatively quiet day on the economic calendar through the Asian session this morning, with the Japan markets closed.

Economic data was limited to September retail sales figures out of Australia.

Outside of the numbers, the markets responded further to U.S nonfarm payrolls from Friday and optimism over trade.

News of the U.S and China intending to sign phase 1 of an agreement was positive. There was also news that the U.S would be issuing licenses for U.S companies to sell tech to Huawei Technologies.

For the Aussie Dollar

Retail sales rose by just 0.2%, month-on-month, in September, following on from a 0.4% rise in August. Economists had forecasted a 0.5% increase.

According to the ABS,

  • Increases in sales were seen in other retailing (+0.8%), cafes, restaurants, and takeaway services (+0.6%), and food retailing (+0.1%).
  • Falls in the sales of clothing, footwear and personal accessory retailing (-0.5%) and department stores (-0.2%) weighed.
  • Retail sales of household goods came in flat.
  • Quarter-on-quarter, retail sales fell by 0.1%, reversing a 0.1% rise from the 2nd
  • Cafes, restaurants and takeaway food services led the way down, falling by 1%.
  • Other retailing (+0.3%), and clothing, footwear, and personal accessories (+0.3%) saw increases in sales.
  • The retail sales of household goods also came in flat for the quarter.

The Aussie Dollar moved from $0.69191 to $0.69064 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.03% to $0.6906, with the disappointing retail sales figures reversing earlier gains. Household consumption remains key for the RBA, which delivers its interest rate decision tomorrow.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.03% to ¥108.22 against the U.S Dollar, while the Kiwi Dollar was up by 0.16% to $0.6437.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Economic data due out of the Eurozone includes October prelim manufacturing PMI numbers from Spain and Italy. Later in the morning, finalized manufacturing PMIs are due out of France, Germany, and the Eurozone.

Barring deviation from prelim numbers, Italy and the Eurozone’s PMis will likely have the greatest influence on the day.

On the geopolitical risk front, news from the UK on the latest general election polls and any chatter on trade will also influence.

At the time of writing, the EUR was down by 0.05% to $1.1160.

For the Pound

It’s a relatively quiet day ahead on the data front. October’s construction PMI is due out later this morning.

We can expect Pound sensitivity to today’s figures, though the news wires could have a greater impact on the day.

With the U.S President facing the possibility of impeachment, Boris Johnson has also reportedly found himself in hot water.

News hit the wires over the weekend of the British police presenting a criminal case against Vote Leave to the crown prosecution. The campaign group reportedly overspent during the EU Referendum, with Boris Johnson, Dominic Cummings, and Michael Gove allegedly being aware of the offense.

While Dominic Cummings reportedly stated that both Johnson and Gove were unaware of the overspending at the time, the two were aware at a later date and failed to report the offense. The reaction in Parliament to the reports and how the Crown Prosecution plans to proceed will have an impact on the Pound.

At the time of writing, the Pound was down by 0.09% to $1.2934.

Across the Pond

It’s a relatively quiet day ahead on the economic calendar. Key stats are limited to September factor order figures.

While we can expect the numbers to have an influence, chatter on trade and updates from the UK will also provide direction.

The Dollar Spot Index was up by 0.01% to 97.247 at the time of writing.

For the Loonie

It’s a quiet day on the economic calendar. There are no material stats due out of Canada later today.

A lack of stats leaves the Loonie in the hands of market sentiment towards trade and influence on crude oil prices.

The Loonie was down by 0.02% to C$1.3145, against the U.S Dollar, at the time of writing.

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