Economic Data Puts the Majors in the Spotlight, with COVID-19 also in Focus

Earlier in the Day:

It was a particularly busy start to the day on the economic calendar this morning. The Japanese Yen, Kiwi Dollar, and the Aussie Dollar were all in action, with stats from China also in focus in the early hours.

For the Japanese Yen

Tankan survey numbers for the 2^nd quarter were in focus this morning.

In the 2^nd quarter, the All-Big Industry CAPEX jumped by 9.6%, following a 3% rise in the 1^st quarter. Economists had forecast a 5.2% increase.

The Big Manufacturing Outlook Index climbed from 4 to 13 versus a forecasted rise to 17.

There was also a marked increase in the Large Manufacturers Index, which climbed from 5 to 14. Economists had forecast an increase to 15.

Large Non-Manufacturers saw a more modest rise from -1 to 3 versus a forecasted increase to 10.

With the markets focused on the Tankan survey numbers, the finalized manufacturing PMI figures for June had a muted impact on the Yen.

In June, the Manufacturing PMI fell 53.0 to 52.4, which was up from a prelim 51.5.

The Japanese Yen moved from ¥111.132 to ¥111.135 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.05% to ¥111.060 against the U.S Dollar.

For the Kiwi Dollar

Building consents fell by 2.8% in May, partially reversing a 5.1% rise from the previous month.

The Kiwi Dollar moved from $0.69919 to $0.69918 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.06% to $0.6987.

For the Aussie Dollar

The manufacturing sector was also in focus ahead of trade data later in the morning.

In June, the AIG Manufacturing Index rose from 61.8 to a new series high 63.2.

According to the June Survey,

• All seven of the activity indicators expanded in June.
• By sector, food & beverages, machinery & equipment, building materials, and chemicals all reached record highs.
• Firms attributed the rise to strong demand from construction and agricultural industries, improved exports, local customers seeking local suppliers, low interest rates, and end of financial year sales.

The Aussie Dollar moved from $0.75003 to $0.74996 upon release of the figures that preceded the trade data.

In May, Australia’s trade surplus widened from A$8.028bn to A$9.681bn. Exports rose by 6% following a 3.3% increase in April, with imports up 3%, reversing a 2.7% fall from April.

The Aussie Dollar moved from $0.74854 to $0.74891 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.12% to $0.7489.

Out of China

In June, the Caixin Manufacturing PMI fell from 52.0 to a 3-month low 51.3. Economists had forecast a decline to 51.9.

According to the June Survey,

• A softer increase in production weighed on the headline figure, with production rising at the slowest pace since Mar-2020.
• Total new business also expanded at a slower rate, with the rate of increase the slowest seen for 3-months.
• In spite of this, firms continued to hire, with the pace of hiring the second strongest since Jan-2013.
• Backlogs increased for a 4^th consecutive month in a row, though the rate of accumulation was modest.
• Inflationary pressures eased in June, with the rate of input price inflation softening to a 7-month low.
• As a result, prices charged by manufacturers rose at the slowest pace since February.
• Optimism amongst manufacturers remained steady, with the degree of optimism unchanged from May’s 4-month low.

The Aussie Dollar moved from $0.74891 to $0.74896 upon release of the figures.

The Day Ahead

For the EUR

It’s a busy day ahead on the economic data front. Manufacturing PMI figures are due out of Italy and Spain. Finalized manufacturing PMIs are also due out of France, Germany, and the Eurozone.

Barring any revisions to prelim figures, expect Italy and the Eurozone’s PMIs to have the greatest impact on the EUR.

Later in the day, unemployment numbers for the Eurozone will also draw interest.

At the time of writing, the EUR was down by 0.07% to $1.1850.

For the Pound

It’s a relatively quiet day ahead on the economic calendar.  June’s finalized Manufacturing PMI is due out in the early part of the day. With little else for the markets to consider, on the economic data front, expect any revisions to influence.

Away from the economic calendar, COVID-19 will also continue to influence.

At the time of writing, the Pound was down by 0.12% to $1.3815.

Across the Pond

It’s a relatively busy day ahead.

Jobless claims and ISM Manufacturing PMI figures will be in focus later in the day.

Expect the jobless claim figures to be the key driver. A fall to sub-350k levels should drive Dollar demand,

At the time of writing, the Dollar Spot Index was down by 0.03% to 92.411.

For the Loonie

It’s a particularly quiet day ahead on the economic data front. There are no material stats to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of market risk sentiment on the day.

At the time of writing, the Loonie was down by 0.06% to C$1.2406 against the U.S Dollar.

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