Private Sector PMIs, Capitol Hill, and COVID-19 in the Spotlight

Earlier in the Day:

It’s was a busy start to the week on the economic calendar this morning. The Aussie Dollar and the Japanese Yen were in action in the early in the day, with economic data from China also in focus.

For the Aussie Dollar

In January, the AIG Manufacturing Index rose from 52.1 to 55.3.

According to the January survey,

• Manufacturers reported stronger and more broad-based recovery over the summer holiday period.
• 5 of the 6 manufacturing sectors reported positive trading conditions during Dec-2020 and Jan-2021.
• Machinery & equipment and chemicals, pharmaceuticals, cleaning, rubber, petroleum & related product manufacturers saw the strongest results.

At the time of writing, the Aussie Dollar was down by 0.08% to $0.7638.

For the Japanese Yen

The finalized Manufacturing PMI came in at 49.8 for January, which was up from a prelim 49.7, while down marginally from a December 50.0.

According to the Market survey,

• The marginal deterioration in sector conditions was attributed to a renewed decline in output volumes.
• Production has now failed to register outright growth since December 2018.
• New orders were stable in January, ending a run of 24 consecutive monthly declines.
• Export demand fell for a 3^rd consecutive month, however, with the rate of decline accelerating from December.
• Employment levels returned to contraction, also weighing on the headline PMI. The rate of job shedding was the most marked since August of last year.
• Firms remained optimistic, however, supported by hopes of an end to the pandemic.

The Japanese Yen moved from ¥104.699 to ¥104.689 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.02% to ¥104.66 against the U.S Dollar.

From China

The Caixin Manufacturing PMI fell from 53.0 to 51.5. Economists had forecast a rise to 54.8.

According to the Caixin survey,

• Business conditions improved at the slowest rate for 7 months at the start of the year.
• The COVID-19 pandemic weighed on demand conditions.
• New orders rose at a softer pace, with new export work falling for the first time in 6 months.
• After stabilizing at the end of last year, employment also fell at the start of the year.
• Optimism amongst manufacturers fell to an 8-month low in January.

The Aussie Dollar fell from $0.76376 to $0.76336 upon release of the figures.

Elsewhere

At the time of writing, the Kiwi Dollar was down by 0.10% to $0.7186.

The Day Ahead:

For the EUR

It’s a particularly busy day ahead on the economic calendar.

Key stats include Italy, Spain and Eurozone manufacturing PMI figures and German retail sales numbers.

Finalized manufacturing PMIs from France and Germany and unemployment figures from the Eurozone are also due out. Barring a marked deviation from prelims and an unexpected jump in unemployment, the figures should have a muted impact on the EUR, however.

Away from the economic calendar, COVID-19 news will remain a key driver, with vaccination rates and vaccine supply also in focus.

At the time of writing, the EUR was down by 0.05% to $1.2130.

For the Pound

It’s a relatively quiet day ahead on the economic calendar. January’s finalized manufacturing PMI will be in focus later today.

Barring a downward revision from prelim, however, the numbers should have a muted impact on the day.

UK vaccination rates and government measures to contain the virus will remain key drivers.

At the time of writing, the Pound was up by 0.13% to $1.3726.

Across the Pond

It’s a relatively busy day ahead on the economic calendar. January’s ISM Manufacturing PMI and finalized Markit Manufacturing PMI are due out later today.

Expect the ISM Manufacturing PMI to have the greatest influence.

Away from the economic calendar, chatter from Capitol Hill and COVID-19 updates will also remain in focus, however. The markets will be looking for progress towards further fiscal stimulus to support the economic recovery.

At the time of writing, the Dollar Spot Index was down by 0.02% to 90.563.

For the Loonie

It’s a particularly quiet day on the economic data front, with no material stats to provide the Loonie with direction.

The lack of stats will leave PMI numbers from the China, the Eurozone and the U.S and COVID-19 news and stimulus talks to influence.

At the time of writing, the Loonie was down by 0.06% to C$1.2785 against the U.S Dollar.

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