Economic Data, Coronavirus News, and the ECB in Focus on a Busy Day for the Markets

Earlier in the Day:

It was a busy start to the day on the economic calendar this morning. The Japanese Yen, the Aussie Dollar, and Kiwi Dollar were in action in the early part of the day.

Outside of the numbers, positive updates on treatment drug remdesivir and the promise of support from the FED supported the demand for riskier assets.

Coronavirus numbers were on the rise through the start of the week, though they had a muted impact on risk sentiment. In spite of the uptick, the downtrend from earlier in the month continued, with the uptick unlikely to be enough to question plans to ease lockdown measures.

On Wednesday, the number of new coronavirus cases rose by 75,118 to 3,134,199. On Tuesday, the number of new cases had risen by 75,118. While up from Tuesday, this was down marginally from a 78,442 increase on the previous Wednesday.

France, Germany, Italy, and Spain reported 8,651 new cases on Wednesday, which was up from 6,020 new cases on Tuesday. France reported just 509 new cases, while Spain reported a 4,771 jump on the day.

From the U.S, the total number of cases rose by 27,752 to 1,063,517 on Wednesday. On Tuesday, the total number of cases had risen by 25,258. On Wednesday, 22^nd April, the total new number of cases had risen by 25,985.

For the Japanese Yen

Industrial production and retail sales figures for February were in focus early in the day.

According to the Ministry of Economy, Trade, and Industry, retail sales slid by 4.60% in March, reversing a 1.7% jump in February, year-on-year. Economists had forecasts a 4.70% decline.

Industrial production slid by 3.7% in March, following a 0.3% decline in February. Economists had forecast a 5.2% decline.

According to the Ministry of Economy, Trade and Industry,

Industries that mainly contributed to the decrease were:

• Motor vehicles, production machinery, and inorganic and organic chemicals.

Industries that mainly contributed to the increase were:

• Transport equipment and pulp, paper & paper products.

The Japanese Yen moved from ¥106.599 to ¥106.613 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.02% to ¥106.66 against the U.S Dollar.

For the Kiwi Dollar

Business confidence took another hit in April, with the ANZ Business Confidence Index falling from -63.5 to -66.6.

According to the latest ANZ Report,

• A net 55% of firms expect weaker economic activity in their own business, with the retail sector the weakest at -67%. This was another sharp decline from -26.7% in March.
• Employment intentions fell from a net 23% of firms intending to reduce employment to a net 50.8%
• Investment intentions slid from a negative 14% to a negative 44.9%.
• Profit expectations fell from 33.6 points to a net 70.4% expecting lower profitability.
• Export intentions fell -16 points to -42.

The Kiwi Dollar moved from $0.61216 to $0.61185 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.05% at $0.6030.

Out of China

The NBS Composite PMI increased from 53.0 to 53.4 in April. While the Manufacturing PMI slipped from 52.0 to 50.8, the Non-Manufacturing PMI rose from 52.3 to 53.2.

The Aussie Dollar moved from $0.65378 to $0.65349 upon release of the figures that preceded the Caixin survey Manufacturing PMI.

In April, the Caixin Manufacturing PMI stood at 49.4, which was down from 50.1 in March. Economists had forecast a rise to 50.3.

According to the latest Caixin Survey,

• Output continued to see a pickup following the easing in lockdown measures, while export sales slumped.
• With other major economies in lockdown throughout April, demand weighed heavily on the sector.
• Total new orders fell for a 3^rd consecutive month, which was attributed to weaker demand from overseas.
• Weaker conditions led to a cut back in staff numbers and input purchases.
• In spite of the lack of demand, manufacturers reported a 2^nd consecutive monthly increase in production.
• Optimism across manufacturing companies fell to a 4-month low in April. Concerns over the longevity and severity of the pandemic and its impact on global demand weighed.

The Aussie Dollar moved from $0.65402 to $0.65432 upon release of the figures.

For the Aussie Dollar

Total sector credit jumped by 1.1% in March, following a 0.4% increase in February.

According to figures released by RBA,

• Business credit surged by 2.9%, following a 0.9% rise in February.
• Personal credit slid by 1.4%, however, following a 0.5% decline in February.
• Housing credit rose by 0.3%, rising at the same pace as in the previous month.

The Aussie Dollar moved from $0.65336 to $0.65402 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.14% to $0.6548.

The Day Ahead:

For the EUR

It’s a particularly busy day ahead on the economic calendar. Key stats include 1^st quarter GDP numbers for France, Spain, and the Eurozone. German and Eurozone unemployment figures will also garner plenty of attention.

We would expect retail sales figures from France and Germany and prelim April inflation figures to have a muted impact, however.

Inflation figures for France, Italy, Spain, and the Eurozone are due out today.

While the stats will have some influence, the ECB’s monetary policy decision is the main event of the day.

Expect the Press Conference to draw plenty of interest. Will Lagarde place the onus firmly on member states to deliver further support or will the ECB step in? Perhaps a bit of both…

At the time of writing, the EUR was down by 0.03% to $1.0870.

For the Pound

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

The lack of stats leaves the Pound in the hands of market risk appetite and COVID-19 news on the day.

At the time of writing, the Pound was down by 0.03% to $1.2465, with a pickup in the number of deaths and new cases weighing early on.

Across the Pond

It’s a busy day ahead on the U.S economic calendar. Key stats include March inflation and personal spending figures and the weekly jobless claims figures.

We would expect the personal spending and initial jobless claims to have the greatest influence on the day.

The markets will be looking for the weekly claims to slide back from levels seen in recent weeks…

The Dollar Spot Index was up by 0.01% to 99.572 at the time of writing.

For the Loonie

It’s a relatively busy day on the economic calendar, with February GDP numbers and March’s RMPI in focus.

The stats are dated, however, which should limit any impact on the Loonie later today. Outside of the number, expect crude oil prices to continue to provide support.

The Loonie was up by 0.06% to C$1.3873 against the U.S Dollar, at the time of writing.