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Economic Data to Take a Back Seat as Market Volatility Continues to Hit the Majors

By:
Bob Mason
Published: Mar 13, 2020, 04:18 UTC

As the week comes to a rapid end, the markets continue to struggle as the spread of the coronavirus makes some governments look inept.

EUR/USD, DAX, Gold

Earlier in the Day:

It was another relatively quiet day on the Asian economic calendar this morning.

The Kiwi Dollar was in action through the early part of the day, with Business PMI numbers in focus.

For the Kiwi Dollar

The Business PMI jumped from 49.6 to 53.2 in February. Economists had forecast a rise to 50.3.

The Kiwi Dollar moved from $0.60976 to $0.61276 upon release of the figures. At the time of writing, the Kiwi Dollar up by 0.69% to $0.6132. The good news is that the manufacturing sector activity was buoyant in February. It may be another story in March, however…

Elsewhere

At the time of writing, the Japanese Yen was down by 0.32% to ¥104.98 against the U.S Dollar, while the Aussie Dollar was up by 0.96% to $0.6296.

The Aussie Dollar and Kiwi Dollar found early support in spite of the sell-off in the equity markets. Any upward trend may well be short-lived, however, as the coronavirus continues to wreak havoc.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Finalized February inflation figures are due out of France, Germany, and Spain.

Barring a material deviation from prelim figures, the numbers are unlikely to have an impact on the EUR. We can expect the markets to have a greater interest in March numbers that will likely reflect the impact of the coronavirus.

Italy’s shut down in March and the continued spread of the virus across Europe will almost certainly hit consumption that should lead to a buildup of deflationary pressure.

Outside of the numbers, expect updates from the coronavirus to continue to support the EUR, with the spread of the virus unlikely to abate any time soon.

At the time of writing, the EUR was up by 0.25% at $1.1213.

For the Pound

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

The lack of stats will leave the Pound in the hands of Brexit chatter ahead of next week’s talks and coronavirus updates.

For the UK, containment is particularly easy and the government may need to consider closing down borders to prevent a mass spread. Such a move could give the Pound much-needed support should the spread of the virus remain moderate in the coming weeks.

For now, however, downward pressure remains as the markets price in further monetary policy easing by the BoE. Capital outflows have also hit hard as carry trades unwind.

At the time of writing, the Pound was down by 0.14% to $1.2554.

Across the Pond

It’s a relatively busy day ahead on the U.S economic calendar. March prelim consumer sentiment and expectation figures are due out later this afternoon.

We will expect the figures to reflect the impact of the coronavirus on consumer sentiment. A slide in consumer sentiment and it could spell more trouble for the U.S economy that relies on consumer spending.

Import and export price index figures, which are also due out, will likely have a muted impact on the Dollar.

Outside of the numbers, updates on the spread of the coronavirus in the U.S will also need consideration as the U.S prepares to block travel from Europe ex UK.

The biggest take away from Wednesday’s national address was the administration’s shortcomings. A clear inability to comprehend the gravity of the situation and failure to introduce early containment measures could be the end of Trump’s run for a 2nd term…

The Dollar Spot Index was down by 0.04% to 97.432 at the time of writing.

For the Loonie

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

The lack of stats will continue to leave the Loonie in the hands of crude oil prices and market risk sentiment on the day.

Both remain negatives for the Loonie, which continues to bring C$1.40 levels into play against the Greenback…

The Loonie was down by 0.08% at C$1.3936 against the U.S Dollar, at the time of writing.

About the Author

Bob Masonauthor

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.

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