Economic data will garner some interest today, though much will depend on the news wires. Market sensitivity towards the virus is not going to ease anytime soon.
It was a relatively busy start to the week on the economic calendar this morning. The Kiwi Dollar and Aussie Dollar were in action through the early part of the day, with economic data out and monetary policy in focus.
While economic data was in focus, the markets also reacted to the overnight moves in the U.S.
A realization that neither monetary nor fiscal policy would offset the immediate impact of the virus remains evident across the global financial markets.
Later in the morning, finalized industrial production figures out of Japan would likely have a muted impact on risk appetite.
Consumer sentiment for the 1st quarter was in focus early in the session. The Westpac Consumer Sentiment Index slid from 109.9 to 104.2 in the 1st quarter.
According to the latest Westpac report,
Looking at the sub-indexes, consumers appeared to be concerned with the near-term economic outlook, but less concerned over its impact on personal finances.
The Kiwi Dollar moved from $0.60524 to $0.60430 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.73% to $0.6089.
House prices were on the rise in the 4th quarter, with the house price index rising by 3.9%, following a 2.4% increase in the 3rd quarter. Economists had forecast a 3.9% increase.
According to the ABS,
The RBA meeting minutes garnered a greater degree of attention, however, with the markets eager to get a sense of what’s next.
Salient points from the 3rd March Minutes included,
The Aussie Dollar moved from $0.61119 to $0.61154 upon release of the stats and minutes. At the time of writing, the Aussie Dollar was up by 0.20% to $0.6129, with no major surprises in the minutes to hit the Aussie.
At the time of writing, the Japanese Yen was down by 0.81% to ¥106.69 against the U.S Dollar.
It’s a relatively busy day ahead on the economic calendar. Economic data includes ZEW Economic Sentiment figures for Germany and the Eurozone and 4th quarter Eurozone wage growth figures.
Expect the March sentiment figures to have a greater influence from the economic calendar. The March figures will reflect the impact of the coronavirus on economist and analyst sentiment towards the economic outlook.
We would expect any positive numbers to have a muted impact on the EUR, with the outlook towards the Eurozone economy dire for now.
While the ECB’s latest monetary policy move could see outflows from the EUR, the unwind of carry trades is unlikely to abate near-term. There are just too many unknowns to support a drive towards emerging market currencies at present.
At the time of writing, the EUR was down by 0.10% at $1.1172.
It’s a busy day ahead on the economic calendar. January’s unemployment and wage growth figures are due out along with February claimant counts.
We’ve seen the BoE deliver monetary policy support, with more on the cards as BoE Governor Carney heads for the door.
Any spike in claimant counts and slide in wage growth would certainly be a bad combination. Negative numbers would support another move by the BoE, particularly with other central banks throwing in the kitchen sink.
At the time of writing, the Pound was down by 0.24% to $1.2241.
It’s a busy day ahead on the U.S economic calendar. February retail sales and industrial production figures are due out along with January’s JOLT’s job openings and business inventories.
Expect retail sales to have the greatest impact, with January’s JOLTs job openings unlikely to reflect the effects of the coronavirus.
When considering the retail sales figures, expect weak numbers to have a greater impact, with sales likely to plummet in March and April.
Outside of the numbers, there’s always the U.S administration there to deliver Dollar weakness…
The Dollar Spot Index was up by 0.07% to 98.141 at the time of writing.
It’s a relatively busy day ahead on the economic calendar, with manufacturing sales and foreign securities purchases in focus.
The January numbers are unlikely to move the dial, with the coronavirus yet to have shown its teeth at the start of the year.
With the FED slashing rates to zero and spooking the markets, crude oil prices tanked on Monday. Price action added further pressure on the BoC to deliver more…
We’ve seen plenty of emergency moves, the BoC may not be in a position to wait…
The Loonie was up by 0.22% at C$1.3985 against the U.S Dollar, at the time of writing, with early support coming from a rise in crude oil prices.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.