Service Sector PMIs and ADP Nonfarm Put the EUR, the GBP, and the USD in Focus

Earlier in the Day:

It was a busy start to the day on the economic calendar this morning. The Kiwi Dollar, the Japanese Yen, and the Aussie Dollar were all in action this morning. Economic data from China was also in focus.

For the Kiwi Dollar

Employment figures were in focus this morning.

In the 2^nd quarter, employment increased by 1.0%, quarter-on-quarter, coming in ahead of a forecasted 0.9% rise. Employment had risen by 0.6% in the 1^st quarter of this year. As a result of the increase, the unemployment rate fell from 4.7% to 4.0%. Economists had forecast a decline to 4.6%.

According to NZ Stats,

• In the quarter, the fall in unemployment was the largest since the survey began back in 1986.
• The number of people underutilized fell by 13.3% to reach 315,000. This was the largest quarterly decline since the series began in 2004.

The Kiwi Dollar moved from $0.70309 to $0.70424 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.58% to $0.7058.

For the Japanese Yen

In July, the services PMI fell from 48.0 to 47.4, which was up from a prelim 46.4.

According to the finalized survey,

• New business inflows fell at a faster pace, extending the current sequence of decline to 18-months.
• Aggregate new orders fell at a quicker pace than new export orders, which fell at the slowest pace since Feb-2020.
• Employment levels reduced for the 1^st time in 7-months as a result of rising COVID-19 infections and the fall in demand.
• Average cost burdens increased for the 8^th month in a row, with the rate of acceleration the most marked since April.
• Business optimism remained strong in July, despite softening from June’s recent high.

The Japanese Yen moved from ¥108.960 to ¥108.981 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.01% to ¥109.030 against the U.S Dollar

For the Aussie Dollar

Finalized retail sales figures were in focus this morning. In June, retail sales fell by 1.8%, which was in line with prelim figures. Retail sales had risen by 0.4% in May.

According to the ABS,

• Food retailing rose by 1.5%, while household goods retailing fell 1.3% in June.
• More significantly, clothing, footwear, & personal accessory retailing tumbled by 9.5%, with department store sales down 7.0%.
• Lockdown measures also weighed on cafes, restaurants, & takeaway food services, which slid by 6.0%.
• Compared with June 2020, retail sales were up 2.9%

The Aussie Dollar moved from $0.73963 to $0.73919 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.14% to $0.7406.

From China

Service sector activity was in focus this morning. In July, the Caixin Manufacturing PMI increased from 50.3 to 54.9. Economist had forecast an increase to 50.6.

According to the July Survey,

• New business was on the rise, with the rate of new order growth seeing a marked increase. In spite of this, new export growth remained a drag due to the pandemic.
• Employment increased at the start of the quarter, though the increase in hiring was modest.
• The rate of input cost inflation quickened. This was attributed to higher staff, fuel, and raw material costs in July.
• Prices charged also increased, with the rate of inflation the quickest seen year-to-date.
• Business confidence picked up from June’s 9-month low, though remained below the long-run average.

The Aussie Dollar moved from $0.73919 to $0.74025 upon release of the figures.

The Day Ahead

For the EUR

It’s a busy day ahead on the economic data front. Italian and Spanish Service PMIs are due out later today along with Eurozone retail sales figures.

Finalized services and composite PMIs are also due out of France, Germany, and the Eurozone.

Barring marked revision to prelim numbers, Italy and the Eurozone’s PMIs and Eurozone retail sales will be key.

At the time of writing, the EUR was up by 0.05% to $1.1870.

For the Pound

It’s a quiet day ahead on the economic calendar. Finalized services and composite PMIs for July are due out later today.

With the BoE in action on Thursday, expect any upward revisions to deliver a boost for the Pound.

At the time of writing, the Pound was up by 0.06% to $1.3924.

Across the Pond

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

ADP nonfarm employment change and ISM Non-Manufacturing PMI figures for July will be the key stats of the day.

While the ADP numbers are influential, expect weaker ISM Non-Manufacturing PMI numbers to have a greater impact on the markets.

Finalized Markit PMI numbers are also due out but will likely have a muted impact on the Greenback and the broader market.

At the time of writing, the U.S Dollar Spot Index was down by 0.02% at 92.062.

For the Loonie

It’s a particularly quiet day on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction.

The lack of stats will leave crude oil inventories in focus for the day.

At the time of writing, the Loonie was up by 0.06% to C$1.2531 against the U.S Dollar.

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