Markets Brush Aside China Data as Plans to Ease Lockdown Measures Sink the Dollar

Earlier in the Day:

It was a relatively quiet start to the day on the economic calendar this morning. Economic data was China’s industrial profit figures for March.

Outside of the numbers, the weekend coronavirus numbers and chatter from governments on easing lockdown measures remained key.

On Sunday, the number of new coronavirus cases rose by 71,251 to 2,992,128. A downward trend was seen through the weekend, following Friday’s 112,961 jump.

France, Germany, Italy, and Spain reported 7,063 new cases on Sunday, which was down from 9,526 new cases on Sunday. France reported just 612 new cases on Sunday, with Germany seeing the number of new cases fall for 3 consecutive days.

From the U.S, the total number of cases rose by 26,157 to 960,651 on Sunday. On Saturday, the total number of cases had risen by 35,655, which was down from a 45,566 spike on Friday.

The continued downward trend from last week was evident, supporting government plans to ease lockdown measures.

Concerns over a lack of a treatment drug will likely linger, however. While an easing in lockdown measures is positive, leaving borders closed will also remain market negative near-term.

Out of China

Industrial profits slid by 34.9% in March, year-on-year, following a 5.4% increase in February. Year-to-date, profits were down by 36.7%, which was marginally better than a 38.3% slide to February.

The Aussie Dollar moved from $0.64284 to $0.64385 upon release of the figures. At the time of writing, the Aussie Dollar was up by 1.00% to $0.6435.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.07% to ¥107.58 against the U.S Dollar, while the Kiwi Dollar was up by 0.48% to $0.6046. The Kiwi Dollar trailed the Aussie as talk of negative rates continued to pin the Kiwi back.

The Day Ahead:

For the EUR

It’s a quiet day ahead on the economic calendar. Economic data is limited to french jobseeker totals that are unlikely to have a material impact on the EUR.

March and April’s private sector PMI figures set the tone for the turn of the quarter, with unemployment expected to surge.

The lack of stats will leave the EUR in the hands of COVID-19 news on the day and any chatter from Brussels on a more meaningful aid package.

At the time of writing, the EUR was up by 0.03% to $1.0826.

For the Pound

It’s a particularly quiet day ahead on the economic calendar. There are no material stats to provide the Pound with direction at the start of the week.

A lack of stats leaves the Pound in the hands of Boris Johnson, who returns to the desk today, and the economic outlook.

Britain saw the total number of deaths rise beyond 20,000 on the weekend, with the total number of cases rising to 152,840. On Sunday, however, the total number of COVID-19 related deaths was the lowest since March.

Also positive, was an affirmation that lockdown measures were paying off, with new cases reportedly being fairly stable.

From the UK government, stand-in Raab stated that it was irresponsible to reveal the government’s lockdown exit plan. An update is expected on 7^th May, however, which is the date of the government’s next lockdown review meeting. He also stated that a COVID-19 vaccine would be unlikely this year.

At the time of writing, the Pound was up by 0.21% to $1.2393.

Across the Pond

It’s also a particularly quiet day ahead on the U.S economic calendar. There are no material stats to provide the Greenback with direction.

A lack of stats leaves the Dollar in the hands of market risk sentiment and chatter from Capitol Hill.

A downward trend in COVID-19 cases over the weekend and continued plans to ease lockdown measures should ease demand for the Dollar.

The Dollar Spot Index was down by 0.18% to 100.197 at the time of writing.

For the Loonie

It’s a quiet day on the economic calendar, with no material stats due out to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of market risk appetite and crude oil prices.

Barring a marked cut in global output, last week’s inventories and the latest PMI numbers suggest more doom and gloom.

The Loonie was up by 0.12% to C$1.4086 against the U.S Dollar, at the time of writing. While the Aussie Dollar and Kiwi Dollar found strong support early on, the Loonie trailed with sliding oil prices pinning the Loonie back.