Economic Data from China Sets the Tone, with COVID-19 and Brexit in Focus

Earlier in the Day:

It’s was a busy start to the day on the economic calendar this morning. The Japanese Yen and Aussie Dollar by proxy were in action in the early part of the day. Later today, RBA Governor Lowe is scheduled to speak, which could provide further direction for the Aussie Dollar.

For the Japanese Yen

In the 3^rd quarter, the Japanese economy grew by 5.0%, partially reversing an 8.2% contraction from the 2^nd quarter. Year-on-year, the economy expanded by 21.4% after having contracted by 28.8% in the 2^nd quarter.

Economists had forecasted a quarter-on-quarter rise of 4.4% and an 18.9% rebound, year-on-year.

• Capital expenditure continued to weigh in the 3^rd Quarter-on-quarter, capital expenditure fell by 3.4%, following a 4.5% slide from the 2^nd quarter.
• External demand and private consumption provided support, however.
  • In the quarter, external demand rose by 2.9%, following a 3.3% fall in the 2^nd
  • Private consumption increased by 4.7%, reversing a 3.1% slide from the 2^nd

The Japanese Yen moved from ¥104.679 to ¥104.686 upon release of the figures. At the time of writing, the Japanese Yen up by 0.10% to ¥104.53 against the U.S Dollar.

Out of China

Key stats included October’s fixed-asset investment, industrial production, unemployment, and retail sales figures.

• Industrial production rose by 6.9% in October, following a 6.9% increase in September. Economists had forecast a 6.5% rise.
• Fixed asset investment increased by 1.8%, following a 0.8% increase in September. Economists had forecast a 1.6% increase.
• Retail sales rose by a further 4.3%, following a 3.3% rise in the month prior. Economists had forecast a 4.9% increase.
• The unemployment rate fell from 5.4% to 5.3%, which was in line with forecasts.

The Aussie Dollar moved from $0.72927 to $0.72961 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.33% to $0.7294

Elsewhere

At the time of writing, the Kiwi Dollar was up by 0.60% to $0.6886.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Finalized October inflation figures for Italy are due out later today.

With Brexit and the effects of COVID-19 lockdown measures in focus, the numbers are unlikely to move the dial.

On the monetary policy front, ECB President Lagarde could provide direction, however. Following assurances last week of further support next month, any details would garner plenty of interest.

At the time of writing, the EUR was up by 0.13% to $1.1849.

For the Pound

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

A lack of stats will leave the Pound in the hands of Brexit and COVID-19 news updates.

On the Brexit front, there has been some chatter on extending trade talks…

At the time of writing, the Pound was up by 0.25% to $1.3222.

Across the Pond

It’s a relatively quiet day ahead for the U.S Dollar. NY Empire State Manufacturing Index figures are due out later today.

With the market focus on COVID-19, containment measures, and the likely impact on consumption, the numbers are unlikely to have a material impact on market risk sentiment.

Away from the economic calendar, chatter from Capitol Hill, and COVID-19 news updates will continue to influence.

At the time of writing, the Dollar Spot Index was down by 0.16% to 92.608.

For the Loonie

It’s a quiet day on the economic data front. Manufacturing sales figures for September are due out. Barring particularly dire numbers, however, the stats are unlikely to have a material impact on the Loonie.

Market risk sentiment and COVID-19 news updates will remain the key drivers on the day.

At the time of writing, the Loonie was up by 0.20% to C$1.3111 against the U.S Dollar.

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