Private Sector PMIs, Corporate Earnings and Monetary Policy in Focus

While the focus will remain on corporate earnings and monetary policy, economic data out of the Eurozone and the U.S will also influence.
Bob Mason
Arms trade business concept.

Earlier in the Day:

After a quiet start to the week, the New Zealand Dollar was in action this morning. Economic data out during the Asian session was limited to New Zealand’s June trade figures.

For the Kiwi Dollar

Month-on-month, New Zealand’s trade surplus widened from a revised May’s N$175m to NZ$365m. Economists had forecast a narrowing to NZ$100m. Year-on-year, the trade deficit narrowed from a revised NZ$5,590m to NZ$4,940m in June. According to NZStats,

  • The value of all goods exports increased by NZ$136m (+2.8%) to NZ$5.0bn from June 2018.
    • Exports of logs and wood led the rise, up NZ$65m (+16%).
    • China had the largest increase in exports, up NZ$297m (+27%).
  • The value of all goods imports fell by NZ$515m (-10%) to NZ$4.6bn in June from June 2018.
    • A slide in the imports of fuel was attributed to the decline. Fuel imports fell by NZ$328m compared with June 2018.
    • The numbers were skewed, however, with the shutdown of Marden Point oil refinery back in the 2nd quarter of 2018 driving fuel imports back in 2018.

The Kiwi Dollar moved from $0.67015 to $0.67026 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.12% to $0.6696.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.02% to ¥108.21 against the U.S Dollar, while the Aussie Dollar was down by 0.34% to $0.6981.

In the Asian equity markets, the majors found support early on. The CSI and Hang Seng led the way, up by 0.95% and 0.89% at the time of writing. The ASX200 was up by 0.84%, whilst the Nikkei was up by just 0.57% early on.

Sentiment towards ECB and FED monetary policy, coupled with positive earnings results provided support to the broader market early on. For the Hang Seng and the CSI300, news of face to face trade talks commencing next week was also positive.

The Day Ahead:

For the EUR

It’s also a particularly busy day ahead. Key stats due out of the Eurozone include prelim private sector PMI numbers out of France, Germany, and the Eurozone.

While we can expect the focus to be on Germany’s manufacturing PMI, a better than forecasted Eurozone composite would offset any weak German numbers.

Outside of the stats, geopolitical risk will continue to be of influence, with corporate earnings also in focus on the day.

At the time of writing, the EUR was down by 0.06% to $1.1145.

For the Pound

There are no material stats due out of the UK. The lack of stats will leave the Pound in the hands of the next British PM and Brexit chatter.

At the time of writing, the Pound was down by 0.06% to $1.2432.

Across the Pond

It’s a relatively busy day ahead. Key stats due out of the U.S include July prelim private sector PMIs and June new home sales.

While we would expect the services PMI to be the key driver, the manufacturing sector will need to support. The devil will likely be in the details, with employment, productivity and new orders likely to be the main area of focus.

Outside of the numbers, expect any chatter from the Oval Office to also influence on the day.

At the time of writing, the Dollar Spot Index was up 0.03% to 97.739.

For the Loonie

It’s yet another quiet day ahead, with no material stats due out of Canada. A lack of stats leaves the Loonie in the hands of crude oil prices. While the U.S EIA weekly report will provide direction, sentiment towards trade and Iran will likely remain the key drivers.

The Loonie was flat at C$1.3136, against the U.S Dollar, at the time of writing.

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