Economic Data Puts the EUR and USD in Focus, with the BoJ also in Action

It’s a busy day ahead on the economic calendar with GDP numbers out of the Eurozone likely to set the tone for Lagarde, who takes over as ECB President.
Bob Mason
Press Conference - Eurogroup finance ministers, Luxembourg

Earlier in the Day:

It was a busy day on the economic calendar through the Asian session this morning.

The Kiwi Dollar, Japanese Yen, and Aussie Dollar were all in action.

Key stats included building consent figures and business confidence numbers out of New Zealand, industrial production figures out of Japan and private sector PMIs out of China.

September building approvals and private sector credit figures out of Australia had a muted impact on the Aussie Dollar.

Later this morning, the BoJ is also due to deliver its October monetary policy decision that will garner plenty of interest.

Outside of the numbers, the markets continued to react to the FED rate cut from Wednesday.

For the Kiwi Dollar

Building consents jumped by 7.2% in September, month-on-month, following on from a 0.9% rise in August. Economists had forecast a 2.3% increase.

According to NZ Stats,

  • For standalone houses only, new dwellings fell by 4.8%.
  • In the year ended September 2019, consents increased by 12%.

The Kiwi Dollar moved from $0.63851 to $0.64001 upon release of the figures that preceded the business confidence numbers.

The ANZ Business Confidence Index rose from -53.5 to -42.4 in October, which was better than a forecasted decline to -54.1.

According to the latest ANZ Report,

  • Firms’ expectations of their own activity over the year ahead fell 2 points to -4. A 5th consecutive decline left the indicator at its lowest level since April 2009.
  • 42% of firms still reported that they expect business conditions to deteriorate in the year ahead.
  • Employment intentions fell by 1 point to a net 9% of firms intending to reduce employment.
  • Investment intentions rose by 3 points to -6%, with profit expectations rising by 4 points. A net 21% of respondents expected profitability to decline.
  • Export intentions fell by 2 points to zero.

The Kiwi Dollar moved from $0.64077 to $0.64120 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.44% to $0.6417.

For the Japanese Yen

Industrial production rose by 1.4% in September, reversing a 1.2% slide in August. Economists had forecast a 0.4% increase. The figures were released by the Ministry of Economy, Trade and Industry.

The Japanese Yen moved from ¥108.780 to ¥108.774 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.13% to ¥108.71 against the U.S Dollar.

For the Aussie Dollar

Month-on-month, private sector credit rose by 0.2% in September, according to figures released by RBA, which worse than a forecast of 0.3%. Private sector credit had risen by 0.2% in August.

In September, building approvals came in flat, month-on-month, following a 0.6% fall in August, according to the ABS. Economists had forecast a 0.1% rise.

The Aussie Dollar moved from $0.69011 to $0.69113 upon release of the figures that preceded the private sector PMIs out of China. At the time of writing, the Aussie Dollar was up by 0.22% to $0.6918.

Out of China

The NBS Manufacturing PMI fell from 49.8 to 49.3 in October, falling short of a forecasted 49.9, with the non-manufacturing PMI falling from 53.7 to 52.8. Economists had forecast a PMI of 53.7.

For the manufacturing sector, it was the 6th consecutive monthly contraction as trade tariffs continue to bite.

The Aussie Dollar moved from $0.69172 to $0.69153 upon release of the figures.

The Day Ahead:

For the EUR

It’s another busy day ahead on the economic calendar. Key stats include German retail sales figures and the Eurozone’s 3rd quarter GDP numbers and October prelim inflation figures.

Unemployment figures from the Eurozone and 3rd quarter GDP numbers from Spain will also garner some attention.

Prelim October inflation figures from France and Italy will likely have a muted impact on the EUR, however.

Outside of the numbers, any further updates on phase 1 of the U.S – China trade deal will also provide direction.

At the time of writing, the EUR was up by 0.14% to $1.1167.

For the Pound

It’s another quiet day ahead on the data front. There are no material stats due out of the UK to provide the Pound with direction.

The focus will remain on the UK Parliament as pre-election chatter builds.

At the time of writing, the Pound was up by 0.16% to $1.2922.

Across the Pond

It’s another busy day ahead on the economic calendar. Key stats include September Core PCE Price Index and personal spending figures and October’s Chicago PMI.

Barring dire numbers, the weekly initial jobless claims, 3rd quarter employment cost, and PCE Price Index figures will likely have a muted impact.

Outside of the numbers, geopolitics remains in focus. The markets will be looking for progress on trade talks following negative updates from Wednesday. News of Trump demanding that China buy as much as $50bn worth of U.S agri goods faced resistance from Beijing.

The Dollar Spot Index was down by 0.29% to 97.366 at the time of writing.

For the Loonie

It’s a relatively busy day on the economic calendar. August GDP numbers and September RMPI numbers are due out of Canada.

We can expect the GDP figures to have the greatest impact on the Loonie. Any dire numbers would weigh heavily following the Bank of Canada’s more cautious tone on Wednesday.

The Loonie was down by 0.04% to C$1.3164, against the U.S Dollar, at the time of writing.

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