Private Sector PMIs, COVID-19, and U.S Politics Keep the EUR, GBP, and USD in Focus

Earlier in the Day:

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

Away from the economic calendar, U.S politics and COVID-19 continued to be the main area of focus.

For the Kiwi Dollar

In September, building permits rose by 3.60%, reversing a 0.2% rise in August.

According to NZ Stats,

• In September, 3,605 new dwellings were consented, comprising 2,052 stand-alone houses, 1,032 townhouses, flats, and units, 403 apartments, and 118 retirement village units.
• In the year ended September 2020, the actual number of new dwellings consented rose by 3.5% to 37,725.

At the time of writing, the Kiwi Dollar was down by 0.11% to $0.6608.

For the Aussie Dollar

The AIG Manufacturing Index rose from 46.7 to 56.3 in October.

According to the October report,

• The manufacturing sector saw expanding conditions for the first time since July.
• Respondents across all sectors noted a jump in sales and new orders stemming from pent up demand from COVID-19 restrictions.
• The jump into expansion was largely driven by a marked improvement in sector conditions across New South Wales.
• While continuing to contract, sector conditions also improved in Victoria after a deep contraction in September.

Building approvals surged by 15.4% in September, month-on-month, reversing a 1.60% decline in August.

According to the ABS,

• Private sector dwellings excluding houses jumped by 23.4%, while private sector houses rose by 9.7%.

The Aussie Dollar moved from $0.70140 to $0.70093 upon release of the figures that preceded China’s manufacturing PMI figures. At the time of writing, the Aussie Dollar was down by 0.10% to $0.7021.

Out of China

The Caixin Manufacturing PMI rose from 53.0 to 53.6 in October. In September, the PMI had fallen from 53.1 to 53.0.

According to the Caixin survey,

• Business conditions improved considerably and were the strongest since January 2011.
• A sharper increase in total new work supported the sector at the start of the quarter.
• The increase in sales was the sharpest since November 2010.
• As a result of the 2^nd wave of the COVID-19 pandemic, however, new export work rose at a much slower pace.
• Output expanded at one of the sharpest paces this decade supported by the jump in total new work.
• Firms maintained a cautious approach to staffing levels, however, in a bid to contain costs.
• This was in spite of business confidence jumping to its highest level since August 2014.

The Aussie Dollar moved from $0.70162 to $0.70208 upon release of the figures

Elsewhere

At the time of writing, the Japanese Yen was up by 0.02% ¥104.64 against the U.S Dollar.

The Day Ahead:

For the EUR

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

Key stats include October manufacturing PMI figures for Italy and Spain. Finalized PMIs are also due out of France, Germany, and the Eurozone.

Barring any marked downward revisions, expect Italy and the Eurozone’s PMIs to have the greatest impact.

Away from the economic calendar, U.S Presidential Election jitters, updates on Brexit, and COVID-19 will also influence.

At the time of writing, the EUR was down by 0.02% to $1.1645.

For the Pound

It’s a relatively quiet day ahead on the economic calendar. October’s finalized manufacturing PMI is due out later today.

Barring a marked downward revision, however, the PMI will unlikely have an impact on the Pound.

Expect Brexit and COVID-19 updates to be the key drivers on the day. An expected announcement to reintroduce lockdown measures will be pound negative, while any positive updates on Brexit would provide support.

At the time of writing, the Pound was down by 0.06% to $1.2939.

Across the Pond

It’s a relatively busy day ahead for the U.S Dollar.

Key stats include finalized Markit Manufacturing PMI numbers and the market’s preferred ISM Manufacturing PMI.

Barring particularly dire numbers, however, the stats will likely have a muted impact on the Dollar and market risk sentiment.

Sentiment towards the U.S Presidential Election and COVID-19 news updates will be the key drivers.

At the time of writing, the Dollar Spot Index was up by 0.01% to 94.052.

For the Loonie

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

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

While China’s manufacturing PMI was Loonie positive, negative sentiment towards the global economic outlook lingered.

At the time of writing, the Loonie was down by 0.05% to C$1.3328 against the U.S Dollar.

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