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Bob Mason
Bank of Canada

Earlier in the Day:

It was a busy day on the economic calendar through the Asian session this morning.

The Aussie Dollar was in action once more, with 3rd quarter GDP numbers and service sector PMI numbers out of China providing direction.

Economic data out of Japan was also in focus, with finalized November service sector PMIs released early in the day.

On the geopolitical front, the markets reacted further to Trump’s latest tariff tirades. The U.S President spoke on Tuesday, saying that he may want to hold off on a China deal until after the Presidential Election…

For the Aussie Dollar

Quarter-on-quarter, the economy grew by 0.4% in the 3rd quarter, falling short of a forecast and 2nd quarter growth of 0.5%. Year-on-year, the economy grew by 1.7%, which was also in line with forecast, whilst accelerating from 1.5% growth in the 2nd quarter.

According to the ABS,

  • Net exports contributed 0.2 percentage points (“pp”) to growth this quarter.
  • Domestic final demand remained subdued, also contributing just 0.2 pp.
  • Government spending was the main contributor, while the household sector was subdued.
  • Dwelling investment fell by 1.7%, marking a 4th consecutive decline, while household expenditure rose by just 0.1%.
  • The household saving ratio rose to 4.8, showing that the reduction to tax payable did not lead to an increase in spending.

The Aussie Dollar moved from $0.68472 to $0.68408 upon release of the figures. At the time of writing, the Aussie Dollar down by 0.15% to $0.6837.

For the Japanese Yen

The November Service sector PMI stood at 50.3 according to finalized figures, which was down from a prelim 50.4, while up from 49.7 in October.

According to the November Markit Report,

  • Activity picked up after the typhoons in October and as the sector recovered from the impact of the consumption tax hike.
  • Growth was modest, however, with new orders seeing softer growth.
  • Optimism rose to a 5-month high, however, with sector employment growth sustained.

The Japanese Yen moved from ¥108.621 to ¥108.602 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.06% to ¥108.57 against the U.S Dollar.

Out of China

The Caixin Service Sector PMI rose from 51.1 to a 7-month high 53.5 in November. Economists had forecast a rise to 51.2.

According to the November Service PMI report,

  • News of planned company expansions, new projects and an improvement in overall demand conditions provided support.
  • New business expanded at a solid pace in November, accelerating from October.
  • From overseas, new business accelerated to a 4-month high.
  • While orders were on the rise, the pace of hiring slowed to a 4-month low, however.
  • In spite of a pickup in sector confidence, sentiment remained low when compared to historical levels.

The Aussie Dollar moved from $0.68355 to $0.68367 upon release of the figures.


At the time of writing, the Kiwi Dollar was down by 0.06% to $0.6516.


The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Key stats include Spanish and Italian service sector PMI numbers for November. Finalized PMI numbers are also due out of France, Germany, and the Eurozone.

Barring material deviation from prelims for French and German numbers, the focus will likely be on the Eurozone composite.

Outside of the stats, with just over a week to go before the UK General Election, there could be greater EUR interest in the polls.

Any chatter on trade would trump UK election talk, however, as the U.S targets France.

At the time of writing, the EUR was down by 0.01% to $1.1081.

For the Pound

It’s a relatively busy day on the data front. Finalized November Service and Composite PMI numbers are due out. Following dire prelim numbers, an upward revision would provide support.

Any upside may be short-lived, however, with UK politics continuing to be the driving force ahead of next week’s election.

At the time of writing, the Pound was up by 0.02% to $1.2998.

Across the Pond

It’s a busy day on the economic calendar. The ADP’s nonfarm employment change figures are due out along with the market’s preferred ISM Non-Manufacturing PMI.

We can expect the stats to have plenty of influence on the day.

Finalized Markit PMI figures will have less influence, however, barring a material revision from prelim numbers.

While the stats will provide direction ahead of next week’s final policy decision of the year, geopolitics will likely remain the key driver.

At the time of writing, the Dollar Spot Index was down 0.01% at 97.732.

For the Loonie

It’s a big day on the economic calendar, with the Bank of Canada in action later today. Following last week’s 3rd quarter GDP numbers, it remains to be seen whether the Committee will deliver a more dovish message.

While BoC Governor Poloz had suggested interest rates were at the right level recently, the BoC had taken a more cautious tone at the last gathering.

That was before last week’s GDP numbers…

Ahead of the policy decision, the Loonie will likely brush aside 3rd quarter labor productivity figures for.

The Loonie was up by 0.06% to C$1.3288, against the U.S Dollar, at the time of writing.

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