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Bob Mason
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Earlier in the Day:

It was a busy start to the day on the economic calendar on Tuesday. The Aussie Dollar, Kiwi Dollar, and the Japanese Yen were in action early in the day. There were also stats from China for the markets to consider.

Away from the economic calendar, COVID-19 news from the U.S continued to leave a dark cloud over the markets. California reported a record number of cases, with Arizona reintroducing lockdown measures.

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Looking at the latest coronavirus numbers

On Monday, the number of new coronavirus cases rose by 153,341 to 10,382,371. On Sunday, the number of new cases had risen by 136,417. The daily increase was higher than Sunday’s rise and up from 126,214 new cases from the previous Monday.

Germany, Italy, and Spain reported 803 new cases on Monday, which was up from 650 new cases on Sunday. On the previous Monday, just 952 new cases had been reported.

From the U.S, the total number of cases rose by 41,940 to 2,674,382 on Monday. On Sunday, the total number of cases had risen by 35,905. On Monday, 22nd June, a total of 29,864 new cases had been reported.

For the Japanese Yen

Industrial production slid by 8.4% in May, following on from a 9.8% tumble in April, according to prelim figures. Economists had forecast a 5.6% decline.

According to the Ministry of Economy, Trade, and Industry,

Industries that mainly contributed to the decrease were:

  • Motor vehicles.
  • Production machinery.
  • Iron, steel, and non-ferrous metals.

Forecasts for June were revised up from 3.9% to 5.7%, with production projected to rise by 9.2% in July.

Industries that mainly contributed to the increase in June:

  • Transport equipment.
  • Production machinery.
  • Electrical machinery, and information, and communication electronics equipment.

Industries that mainly contributed to the increase in July:

  • Transport equipment.
  • Chemicals
  • Electrical machinery, and information, and communication electronics equipment.

The Japanese Yen moved from ¥107.578 to ¥107.583 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.11% to ¥107.70 against the U.S Dollar.

For the Aussie Dollar

May’s private sector credit figures were in focus early on. Month-on-month, private sector credit fell by 0.1% in May, following a stall in April.

According to figures released by RBA,

  • Personal credit fell by a further 1.2%, following a 3.2% slide in April.
  • Business credit declined by 0.6%, reversing a 0.2% rise in April.
  • Housing sector credit rose by 0.2%, following on from a 0.2% increase in April.
  • Year-on-year, total credit increased by 3.2%.
  • Personal credit was down by 10.2%, while business credit rose by 5.9%. Housing sector credit increased by 3.1%.

The Aussie Dollar moved from $0.68713 to $0.68756 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.13% at $0.6875.

For the Kiwi Dollar

June business confidence figures drew attention this morning. The ANZ Business Confidence Index increased from -41.8 to -34.4 in June.

According to the latest ANZ Report,

  • A net 26% of firms expect weaker economic activity in their own business.
  • The construction sector had the weakest activity outlook at -35%, down by 7.2 percentage points.
  • By contrast, the retail and agricultural sectors saw the largest improvements.

The Kiwi Dollar moved from $0.64152 to $0.64167 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.02% at $0.6423.

Out of China

The NBS Manufacturing PMI rose from 50.6 to 50.9 in June, with the Non-Manufacturing PMI increasing from 53.6 to 54.4.

As a result of the uptick, the Composite PMI came in at 54.2, up from 53.4 in May.

The Aussie Dollar moved from $0.68631 to $0.68676 upon release of the figures.

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The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. French consumer spending figures for May and prelim June inflation figures from France, Italy, and the Eurozone are due out. Finalized 1st quarter GDP numbers for Spain are also in focus.

We would expect consumer spending figures from France to have the greatest influence, however. Consumer spending will be key to any economic recovery and rebound in service sector activity. As these are figures for May, any impact on the EUR may be short-lived, however.

Away from the economic calendar, the markets will need to continue to monitor COVID-19 and chatter from Trump on tariffs.

At the time of writing, the EUR was up by 0.02% to $1.1244.

For the Pound

It’s also a relatively busy day ahead on the economic calendar. Finalized 1st quarter GDP and business investment numbers are due out. Barring a material upward revision to prelims, the stats should have a muted impact on the Pound.

On the monetary policy front, MPC members Haldane and Cunliffe are due to speak later, which will draw attention.

Expect updates from Brexit talks and market risk sentiment to be the key drivers on the day.

At the time of writing, the Pound was up by 0.07% to $1.2307.

Across the Pond

It’s a relatively busy day on the U.S economic calendar. Key stats include June’s Chicago PMI and consumer confidence figures, with April house prices figures also due out.

We would expect the CB Consumer Confidence Figures to have the greatest influence. In June, while lockdown measures eased, protests over the unlawful killing of George Floyd swept across the country.

For the U.S economy, a bounce-back in consumer confidence and spending is a must. Last week’s pause by a number of U.S states in reopening may limit the effects of any positive numbers, however.

Trump and COVID-19 news will also need monitoring throughout the day…

At the time of writing, the Dollar Spot Index was down by 0.06% to 97.477.

For the Loonie

It’s a relatively busy day ahead on the calendar. Key stats include April GDP figures, which will likely be brushed aside by the markets.

The focus will remain on geopolitics, COVID-19, and OPEC+ production plans.

At the time of writing, the Loonie was down by 0.01% to C$1.3661 against the U.S Dollar.

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

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