Economic Data to Take a Back Seat with Focus Remaining on Coronavirus Updates and U.S LawmakersFollowing Tuesday’s moves, U.S lawmakers will need to pass the Stimulus Bill and COVID-19 news updates will need to be risk supportive to avoid a reversal.
Earlier in the Day:
It was a relatively busy start to the day on the Asian economic calendar this morning. The Kiwi Dollar was in action, with February trade figures in focus.
Outside of the numbers, however, the latest updates on the spread of the coronavirus and government measures to curb the spread were also in focus.
Central banks have delivered for now, with the FED in particular, so the onus is now on governments to not only contain but support. Through the early part of the session, the Dollar slide continued on expectations that lawmakers would pass the Stimulus Bill.
For the Kiwi Dollar
Month-on-month, the trade balance rose from an NZ$414m deficit to an NZ$594m surplus in February. Year-on-year the trade deficit narrowed from NZ$3,950m to NZ$3,260m.
According to NZ Stats,
- The value of total goods exports rose by NZ$212m (+4.5%) from Feb-19 to reach NZ$4.9bn in Feb-2020.
- Exports of milk powder, driven by higher prices, rose by NZ$191m (+28%).
- There were declines in the exports of forestry products (-27%), fish (-27%), and meat (-1.4%), however.
- Exports to China fell NZ$120m, with a rise in exports of milk powder limiting the damage.
- The value of goods imports in Feb-20 fell NZ$475m (-9.9%) from Feb-19.
- There were declines across all major categories of imported goods.
- The import of industrial transport equipment fell by NZ$161m to lead the way.
- Imports from China slid by NZ$218m (-22%).
The Kiwi Dollar moved from $0.58336 to $0.58291 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.12% to $0.5821.
In the equity markets, the majors were on a tear in response to the European and U.S rallies. The ASX200 was up by 3.47%, with the Nikkei up by 4.73% in early trading.
The Day Ahead:
For the EUR
It’s a relatively busy day on the economic calendar. Germany’s IFO Business Climate Index and Current Assessment and Expectations figures for March are due out.
Following better than expect prelim Manufacturing PMI numbers on Tuesday, particularly dire numbers could hurt the EUR. The markets are expecting a slide, however, which should limit some of the damage on the day.
Outside of the numbers, updates from the Eurozone on the spread of the coronavirus will continue to be the key driver.
With containment measures in place, member states are beginning to reach a critical time where the number of new cases will need to start easing. A continued acceleration will bring even more stringent containment measures into place, including curfews.
At the time of writing, the EUR was up by 0.07% at $1.0796.
For the Pound
It’s a relatively busy day ahead on the economic calendar. February inflation figures are due this afternoon. We’re expecting the consumer numbers to have a muted impact on the Pound, however.
The focus remains on March and April stats for now. At the wholesale level, however, expect the producer price index numbers to give a taste of what’s to come…
Outside of the numbers, with the UK in lockdown, expect the latest coronavirus numbers to also influence.
Moves by the UK Government will also need monitoring on the day. The UK is in lockdown mode, which should be positive for the Pound. Government inaction had certainly weighed previously.
At the time of writing, the Pound was up by 0.17% to $1.1782.
Across the Pond
It’s also a relatively quiet day ahead on the U.S economic calendar. Key stats are limited to February durable goods orders.
While we can expect core durable goods orders to have the greatest impact, there’s unlikely to be too much influence on the Dollar.
We will need to wait for March and April figures to assess the damage.
Outside of the numbers, chatter from Capitol Hill and news updates on the coronavirus will continue to provide direction.
The Dollar Spot Index was down by 0.39% to 101.646 at the time of writing.
For the Loonie
It’s another particularly quiet day ahead on the economic calendar, with no material stats due out later today to provide direction.
Updates from OPEC and the U.S on possible talks will certainly influence ahead of the weekly EIA inventory numbers.
There’s also the U.S Stimulus Bill that would be considered “risk-on” and therefore Loonie positive.
The Loonie was up by 0.22% at C$1.4430 against the U.S Dollar, at the time of writing.