As market jitters over the U.S and China resurface, the ECB and the EU Commission will be in focus later this morning...
It was a relatively busy day on the economic calendar this morning. The Aussie Dollar and Kiwi Dollar were in action, with economic data out of China also in focus.
Away from the economic calendar, the market’s attention returned to U.S – China tensions and China’s security law for HK.
COVID-19 news and numbers did remain supportive, however, with positive vaccine news hitting the news wires in the 1st half of the week.
Looking at the latest coronavirus numbers,
On Tuesday, the number of new coronavirus cases rose by 95,878 to 5,678,282 On Monday, the number of new cases had risen by 83,824. The daily increase was higher than both Monday’s rise and 94,189 new cases from the previous Tuesday.
France, Germany, Italy, and Spain reported 1,535 new cases on Tuesday, which was up from 747 new cases on Monday. On the previous Tuesday, 2,848 new cases had been reported.
From the U.S, the total number of cases rose by 19,185 to 1,725,411 on Tuesday. On Monday, the total number of cases had risen by 19,790. On Tuesday 19th May, a total of 20,688 new cases had been reported.
The RBNZ’s Financial Stability Report was in focus in the early hours.
Salient points from the latest report included,
The Kiwi Dollar moved from $0.61971 to $0.61984 upon release of the report. At the time of writing, the Kiwi Dollar was up by 0.11% to $0.6192.
Construction Work Done fell by 1.0% in the 1st quarter, following on from a 3.0% slide in the 4th quarter. Economists had forecast a 1.5% decline.
According to the ABS,
The Aussie Dollar moved from $0.66512 to $0.66530 upon release of the figures. At the time of writing, the Aussie Dollar down by 0.11% to $0.6646.
Industrial profit figures for April had little influence. Year-on-year, profits were down by 4.3%, following a 34.9% slump in March. Year-to-date, profits were down by 6.75%, following a 36.7% tumble in March.
The Aussie Dollar moved from $0.66512 to $0.66530 upon release of the figures.
At the time of writing, the Japanese Yen was up by 0.04% to ¥107.50 against the U.S Dollar.
It’s a relatively quiet day ahead on the economic calendar. While there are no material stats due out of the Eurozone, the ECB and the EU Commission are in focus today.
In the early part of the European session, ECB President Lagarde is scheduled to speak. Expect any chatter on monetary policy or the economic outlook to influence. Lagarde’s speech precedes the release of the ECB’s Financial Stability Review. We will expect the review to be a key area of focus for the markets today.
With the ECB in focus early in the day, Brussels will also be in the spotlight. The European Commission is due to announce the COVID-19 Recovery Fund and EU Budget.
At the time of writing, the EUR was down by 0.10% to $1.0971.
It’s another quiet day ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.
A lack of chatter on Brexit and the risk-on sentiment has provided the Pound with further support this week. Expect any updates on Brexit and COVID-19 to test this support, however.
At the time of writing, the Pound was down by 0.06% to $1.2327.
It’s also a quiet day ahead on the U.S economic calendar. Following Tuesday’s consumer confidence figures, there are no material stats to influence later today.
A lack of stats leaves geopolitics center stage. On Tuesday, U.S President Trump stated that there would be a U.S response to China’s plans for HK by the end of the week… Measures could include sanctions on China…
The Dollar Spot Index was up by 0.14% to 99.042 at the time of writing, with the U.S – China jitters providing support.
It’s a relatively quiet day on the economic calendar. Building permit figures are due out later today that will likely have a muted impact on the Loonie.
With concerns over the U.S – China relations and the prospects of sanctions on China resurfacing, we can expect the Loonie to be under pressure.
Much will depend on how Beijing will respond to any steps taken by the U.S government. The continued easing of lockdown measures across major economies, remains Loonie positive, however.
At the time of writing, the Loonie was down by 0.06% to C$1.3785 against the U.S Dollar.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.