Economic Data to Take a Back Seat as Markets Look ahead to the FED

Earlier in the Day:

It was a busier start to the day on the economic calendar this morning. The Aussie Dollar was in action early this morning. Later this morning, economic data from China will also be in focus.

For the Aussie Dollar

In December, the Westpac Confidence Sentiment Index fell by 1.0% to 104.3. The index had fallen by 0.6% to 105.3 in November.

According to the latest Westpac Report,

• Concerns over the new Omicron strain weighed on sentiment in the states of NSW and Victoria.
• The survey suggested, however, that there were other reasons for consumers to be more cautious.
• In December, inflation became a key area of focus for surveyed consumers.

Looking at the components,

• The Unemployment Expectations Index jumped by 9.3% to 104.1 following an 11% fall in November to a 26-year low.
• There was also a sharp decline in time to buy a dwelling (-10.2%) and time to buy a major household item (-5.3%).
• Sentiment towards economic conditions next 12-months (-1.6%) and next 5-years (-0.5%) weakened.
• By contrast, there was a 1.0% increase in family finances vs a year ago and a 2.1% increase in finances next 12-months.

The Aussie Dollar moved from $0.71020 to $0.71053 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.07% to $0.7109.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.03% to ¥113.730 against the U.S Dollar, with the Kiwi Dollar down by 0.09% to $0.6739.

The Day Ahead

For the EUR

It’s a relatively busy day ahead on the economic calendar. Finalized November inflation figures for France, Spain, and Italy are due out later this morning. Barring any marked revisions from prelim figures, however, we don’t expect the numbers to influence.

At the time of writing, the EUR was up by 0.05% to $1.1265.

For the Pound

It’s another busy day ahead on the economic calendar. November inflation figures are due out today. With the UK government now looking to contain the spread of the Omicron strain, however, we don’t expect the numbers to have a material impact on the Pound. The markets are expecting the BoE to stand pat on policy in order to assess the impact of the rise in new COVID-19 cases on the economy.

At the time of writing, the Pound was up by 0.02% to $1.3233.

Across the Pond

It’s a busy day ahead. NY Empire State Manufacturing Index, import and export price index, and inventory numbers are due out along with retail sales figures.

Expect the retail sales figures to be key as the markets look to assess the impact of rising prices on spending.

On the monetary policy front, however, the FOMC monetary policy decision and economic projections will be main event. The markets will be looking for adjustments to tapering plans and interest rate projections in particular.

At the time of writing, the Dollar Spot Index was down by 0.07% to 96.504.

For the Loonie

It’s a busy day ahead on the economic data front. Inflation and manufacturing sales figures are due out later today. Expect the inflation figures to be key.

While the stats will influence, crude oil inventories and market risk sentiment will remain key, however.

At the time of writing, the Loonie was up by 0.09% to C$1.2851 against the U.S Dollar.

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