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Bob Mason

Earlier in the Day:

It was another busy start to the day on the economic calendar. The Aussie Dollar and Japanese Yen were in action through the Asian session.

Outside of the numbers, the markets also continued to monitor the latest coronavirus numbers.

At the time of writing, the total number of U.S cases stood at 187.347. For Italy, Spain, Germany, and France, the combined number of cases stood at 325,651. The total global number of cases rose to 856,917.

For the Japanese Yen

1st quarter Tankan survey numbers were in focus.

According to the latest survey, All Big Industry CAPEX rose by 1.8% in the 1st quarter, following a 6.8% rise in the 4th quarter. Economists had forecast a 1.1% decline.

With the sector having been in the hands of the U.S – China trade war last year, it was the coronavirus that weighed on sentiment in Q1. The Big Manufacturing Outlook Index slid from 0.0 to -11.0 in the 1st quarter.

Things were not much better for large manufacturers and non-manufacturers. The Large Manufacturers Index fell from 5 to -8, with the Large Non-Manufacturers Index falling from 20 to 8. Economists had been more pessimistic, however…

The Japanese Yen moved from ¥107.524 to ¥107.352 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.13% to ¥107.68 against the U.S Dollar.

For the Aussie Dollar

February manufacturing and building approval figures were in focus ahead of March’s Manufacturing PMI out of China.

In March, the AIG Manufacturing Index rose from 44.3 to 53.7. Following a fall from 45.4 to 44.3 in February, the rebound brought an end to 4-consecutive months of contraction.

According to the March report,

  • Stockpiling was attributed to the boost in local food and grocery manufacturing at the end of the quarter.
  • Personal care items also saw a surge in demand, supporting the March jump.

The Aussie Dollar moved from $0.61497 to $0.61488 upon release of the figures that preceded building approvals and China’s PMI.

Building approvals surged by 19.9% in February, reversing a 15.3% slump in January.

According to the ABS,

  • Private sector houses saw a 0.8% decline, while private sector dwellings excluding houses jumped by 61.7%.

The Aussie Dollar moved from $0.61349 to $0.61324 upon release of the figures that preceded China’s March Manufacturing PMI.

At the time of writing, the Aussie Dollar was down by 0.23% to $0.6117.

Out of China

The Caixin Manufacturing PMI rose from 40.3 to 50.1 in March. Economists had forecast an increase to 45.5.

According to the Caixin survey,

  • Production saw a marginal increase in March, while the pandemic continued to weigh on demand and supply chains.
  • Total new work fell for a 2nd consecutive month, with delivery times lengthening.
  • The global spread of the virus led to a marked decline in new export orders in the month.
  • Employment conditions continued to deteriorate, though the rate of decline eased from the previous month.
  • In spite of the continued spread of the virus, firms remained upbeat that production would increase over the next year.

The Aussie Dollar moved from $0.61197 to $0.61187 upon release of the figures.


At the time of writing, the Kiwi Dollar was down by 0.20% to $0.5944.


The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Key stats due out include March Manufacturing PMIs for Spain and Italy and finalized Manufacturing PMIs for France, Germany, and the Eurozone.

Italy and Spain’s Manufacturing PMIs will certainly garner plenty of attention though expect Italy’s to have the greatest impact. The region’s 2nd largest manufacturer has been in lockdown mode throughout March, so the numbers are likely to be dire…

Any downward revisions to prelim numbers from France, Germany, and the Eurozone will also test support levels. The ECB has talked of a recession and today’s numbers could reinforce that view…

We would expect the Eurozone’s unemployment rate and Germany’s retail sales figures for February to have a muted impact.

Outside of the stats, the latest updates on the coronavirus numbers will also provide direction. A smaller increase in the number of new cases would provide support to the EUR. The latest numbers reflected another sizeable increase on Tuesday, however.

At the time of writing, the EUR was down by 0.18% at $1.1011.

For the Pound

It’s a relatively quiet day ahead on the economic calendar. Finalized March Manufacturing PMI numbers are due out in the early part of the day.

Barring a material deviation from prelim, the PMI should have a relatively muted impact on the Pound.

The focus will remain on the coronavirus numbers, with the UK seeing a steady yet moderate rise. While on the rise, the total remains well below total cases from Italy, Spain, Germany, and France.

At the time of writing, the Pound was down by 0.35% to $1.2377.

Across the Pond

It’s a busy day ahead on the U.S economic calendar. The market’s preferred ISM Manufacturing PMI for March is due out along with ADP Nonfarm Employment Change numbers.

Expect the ISM numbers to have a greater impact on the day.

Finalized Markit Manufacturing PMI numbers should have a muted impact on the Dollar.

Outside of the numbers, chatter from the Oval Office will need monitoring. As numbers continue to surge, hopes of a return to BAU at the end of April may begin to fade.

Should risk aversion return, we could see the Dollar Spot Index return to 100 levels before any pullback. Yes, the U.S economy will suffer but others will see conditions deteriorate more dramatically…

The Dollar Spot Index was up by 0.07% to 99.120 at the time of writing.

For the Loonie

It’s a quiet day ahead on the economic calendar, with no material stats due out of Canada to provide direction.

Expect chatter on the U.S – Russia talks, Saudis production plans, and the weekly EIA inventory numbers to be in focus.

Even decent PMI numbers out of China had failed to stop the slide on Tuesday…

The Loonie was down by 0.30% at C$1.4104 against the U.S Dollar, at the time of writing.

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