The Economic Calendar Puts the EUR, GBP and USD in FocusGeopolitics may finally take a back seat today, with private sector PMIs for December to provide direction on the day…
Earlier in the Day:
It was a busy day on the Asian economic calendar in the earlier hours of this morning.
The Japanese Yen and Chinese Yuan were in action along with the Aussie Dollar by proxy in the early part of the day.
On the geopolitical front, while there was some relief of a phase 1 trade agreement, there are still concerns over what lies ahead.
Tariffs remain, in spite of a rollback, which will continue to pressure the U.S and Chinese economies and global trade.
Outside of trade, there is also the imminent impeachment of President Trump to keep the markets guessing…
For the Japanese Yen
December’s prelim Manufacturing PMI fell from 48.9 to 48.8, while the Services PMI rose from 50.3 to 50.6.
According to the December prelim survey,
- New orders picked up in the month, after having declined in November, supported by a strong demand for services.
- The pickup led to new export orders falling at a slower pace. While the manufacturing sector saw a slower rate of decline, the services sector saw a more accelerated pickup in demand.
- Across the private sector, firms were less optimistic, in spite of the rise in new orders. Service sector firms had a more negative sentiment towards the economic outlook, while the manufacturing sector optimism improved.
The Japanese Yen moved from ¥109.375 to ¥109.381 upon release of the PMI numbers. At the time of writing, the Japanese Yen was up by 0.01% to ¥109.37 against the U.S Dollar.
Out of China
Economic data was on the heavier side.
- Fixed Asset Investment increased by 5.2%, year-on-year, which was in line with forecasts. In October, investment had also risen by 5.2%.
- Retail sales rose by 8.0%, year-on-year, following a 7.2% increase in October. Economists had forecast a 7.6% increase.
- Industrial production rose by 6.2%, year-on-year, in November, which was better than a forecast of 5.0%. In October industrial production had risen by 4.7%.
The Aussie Dollar moved from $0.68770 to $0.68780 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.07% to $0.6881.
At the time of writing, the Kiwi Dollar down by 0.03% to $0.6597.
The Day Ahead:
For the EUR
It’s a particularly busy day ahead on the economic calendar. December’s prelim private sector PMIs are due out of France, Germany, and the Eurozone.
3rd quarter wage growth figures are also due out later in the morning.
While we would expect Germany’s manufacturing PMI to have the greatest impact, service sector activity will need to show improvement.
Wage growth will also influence, with the ECB continuing to rely on consumer spending to support the economy.
Following Boris Johnson’s resounding victory last week, we can also expect Brexit chatter to begin hitting the news wires once more.
At the time of writing, the EUR was up by 0.49% to $1.1184.
For the Pound
December’s prelim private sector PMIs will provide direction to the Pound later this morning.
Expect the service sector PMI to have the greatest impact. With the BoE in action on Thursday, any weak numbers will weigh on the Pound.
On the political front, as the dust from the UK General Election settles, the markets will be looking for timelines on Brexit.
There’s still a long way to go, with the Pound now likely to be in the hands of how well Britain negotiates trade terms. There will also be Boris Johnson’s promises to factor in.
Ultimately, however, economic data has been dire, so sentiment towards the monetary policy should question how far the Pound can go near-term.
At the time of writing, the Pound was up by 0.39% to $1.3383.
Across the Pond
It’s a relatively busy day on the data front. Key stats include December’s prelim private sector PMI numbers.
Expect the services PMI to have the greatest influence on the day.
Barring dire numbers, however, we would expect the NY Empire State Manufacturing Index to have a muted impact on the Dollar.
On the geopolitical front, will this the day that Trump is impeached? Expect moves to distract the news wires if it is…
At the time of writing, the Dollar Spot Index was down 0.08% at 97.096.
For the Loonie
It’s a quiet day on the economic calendar. Economic data is limited to foreign securities purchases that should have a muted impact on the Loonie.
From elsewhere, economic data out of China will provide direction, with industrial production numbers out of China likely to influence crude oil prices.
Private sector PMIs from the Eurozone and the U.S will also play a hand…
The Loonie was down by 0.06% to C$1.3174, against the U.S Dollar, at the time of writing.