The Economic Calendar Puts the EUR, GBP and USD Front and Center

It’s a busy economic calendar. Weak numbers all round and expect the Dollar to claw its way back…
Bob Mason
Europe and USA flag on human male hands

Earlier in the Day:

It was a quieter day on the economic calendar through the Asian session this morning. March employment and business confidence figures out of Australia were the only stats for the markets to consider.

Outside of the numbers, the effects of China’s stats from Wednesday and overnight earnings from out of the U.S influenced risk appetite through the session.

For the Aussie Dollar,

According to figures released by the ABS,

  • The number of employed rose by 7k in March, coming in ahead of a forecasted 12k increase, following February’s 4.6k rise.
  • Full employment rose by 48.3K in March following a 7.3k fall in February.
  • The unemployment rate rose from 4.9% to 5.0% in March, with the participation rate also rising from 65.6% to 65.7%.
  • Part-time employment decreased by 22.6k, following an 11.9k increase in February.
  • Since March 2018, full-time employment increased by 8k, while part-time employment has risen by 14.9k.

According to the latest NAB survey, the business conditions index fell by 5pts to +4 in the 1st quarter of 2019. Business confidence also saw red, falling by 2pts to -1.

  • The retail sector continued to report deteriorating conditions, pointing to a negative outlook on household consumption. Also, a concern for the RBA, tepid wage growth coupled with high levels of household debt has pinned back disposable incomes.
  • While the survey reflected better labor market conditions, firms were less optimistic than a year ago.
  • The employment index fell by 2 pts to +6, as did labor costs growth that fell from 0.7 to 0.5.
  • Expectations for the next 3 and 12-months both fell by 2 pts to +14 and +22 respectively.

The Aussie Dollar moved from $0.71670 to $0.71801 upon release of the figures. At the time of writing, the Aussie Dollar was down 0.01% to $0.7178.

Elsewhere,

At the time of writing, the Kiwi Dollar was down 0.06% to $0.6723 for the session, while the Japanese Yen was up 0.12% to ¥111.93 against the U.S Dollar. A pullback in risk appetite in the early hours led to support for the safe havens.

In the equity markets,

The ASX200 was down 0.03% at the time of writing. Elsewhere, the Nikkei was down by 0.47%, with the Hang Seng and CSI300 also seeing red. The pair were down by 0.29% and 0.08%.

The Day Ahead:

For the EUR,

It is a particularly busy day ahead on the economic calendar. Flash April private-sector PMI figures are due out of France, Germany, and the Eurozone.

Following some particularly disappointing numbers and the IMF’s recent downward revision to growth forecasts for this year, sensitivity to the numbers will be heightened.

The focus will be on Germany’s manufacturing PMI and the Eurozone’s composite. For the EUR to really gather pace, Germany’s manufacturing sector will need to see a slower pace of contraction in April.

Outside of the numbers, market risk sentiment will continue to be a factor throughout the day.

At the time of writing, the EUR was down 0.03% at $1.1293.

For the Pound,

Economic data due out of the UK includes March retail sales figures. While year-on-year figures are forecasts to be positive for the Pound, retail sales are forecasted to fall in March, which will be the key driver.

Softer numbers would certainly ease any pressure on the BoE to make a move near-term…

At the time of writing, the Pound was down 0.03% to $1.3039.

Across the Pond,

It’s a busy day ahead on the economic calendar. March retail sales figures are due out along with February business inventory and private sector PMI numbers.

For the Dollar and risk appetite, the Philly FED Manufacturing Index and Markit Services PMI will be of greater influence, alongside retail sales figures.

A jump in manufacturing and service sector activity, coupled with a rebound in retail sales, would certainly further ease any concerns over the economic outlook. Whether it will be enough to shift sentiment towards an anticipated 3rd quarter rate cut is an altogether different question, however.

The weekly initial jobless claims data is also due out, which will unlikely have an influence barring a jump beyond 220k.

At the time of writing, the Dollar Spot Index was up by 0.03% to 97.036.

For the Loonie,

After a relatively quiet start to the week, it’s a relatively busy day ahead for the Loonie. February retail sales figures are due out of Canada. Coupled with the trade and inflation figures released on Wednesday, the markets will be getting a pretty good idea of how the BoC will view the economy at next week’s meet.

The Loonie was down by 0.13% to C$1.3358, against the U.S Dollar, at the time of writing.

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