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Economic Data Puts the Greenback in Focus as Geopolitical Risk Lingers

Nonfarm payrolls from the U.S will influence later in the day. The UK election opinion polls and trade news also need a watchful eye.
Bob Mason

Earlier in the Day:

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

The Japanese Yen was in action, with household spending figures released in the early part of the day.

On the geopolitical front, hopes of the U.S holding back from rolling out tariffs on 15th December had supported the U.S majors on Thursday. The currency markets seemed less convinced early in the session, however.

For the Japanese Yen

Household spending slumped by 11.5% in October, month-on-month, reversing a 5.5% increase in September. Economists had forecast a 9.8% tumble. Year-on-year, spending fell by 5.1%, partially reversing a 9.5% jump from September. Economists had forecast a 3% fall.

According to the Statistic Bureau,

  • Spending on furniture & household utensils (-16.3%), education (-15.9%), housing (-12.7%), and clothing & footwear (-10.7%) saw the heaviest losses.
  • It was a clean sweep, with spending falling in all of the major categories.
  • The most modest declines in spending were on medical care (-2.8%) and food (-3.9%).

The Japanese Yen moved from ¥108.733 to ¥108.749 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.03% to ¥108.73 against the U.S Dollar

Elsewhere

At the time of writing, the Aussie Dollar up by 0.06% to $0.6838, with the Kiwi Dollar was up by 0.02% to $0.6545.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Key stats are limited to Germany’s industrial production figures for October. While there’s little optimism across the manufacturing sector, we can expect the EUR to react to the numbers.

On the geopolitical risk front, chatter on trade and opinion polls from the UK will also be in focus.

At the time of writing, the EUR was flat at $1.1104.

For the Pound

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

With less than a week remaining until the outcome of next Thursday’s General Election, it’s all eyes on the opinion polls.

There’s another Friday live televised debate later today, with Johnson and Corbyn set to go head to head.

With Corbyn having found rising support from the debates, it could get testy before the market close…

At the time of writing, the Pound was down by 0.02% to $1.3155.

Across the Pond

It’s a big day on the economic calendar. November’s nonfarm payrolls, wage growth, and unemployment numbers are due out ahead of consumer sentiment figures.

We would expect the NFP numbers and wage growth to have the greatest influence on the day.

Anything close to Wednesday’s ADP figures and expect the Dollar to come under pressure.

Barring dire numbers, prelim consumer expectation and sentiment figures for December will likely play 2nd fiddle on the day.

Outside of the stats, chatter on trade will also provide direction on the day.

At the time of writing, the Dollar Spot Index was down 0.01% at 97.397.

For the Loonie

It’s a relatively busy day on the economic calendar, with November employment figures due out of Canada later today.

Expect a move in response to the numbers, as the markets look for a reason for the BoC to change stance on policy.

The Loonie was down by 0.06% to C$1.3182, against the U.S Dollar, at the time of writing.

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