The Weekly Wrap – A Hectic Economic Calendar Left the Greenback Deep in the Red

The Stats

It was a particularly busy week on the economic calendar in the week ending 4^th February.

A total of 76 stats were monitored, following 57 stats in the week prior.

Of the 76 stats, 39 came in ahead forecasts, with 30 economic indicators coming up short of forecasts. 7 stats were in line with forecasts in the week.

Looking at the numbers, 29 of the stats reflected an upward trend from previous figures. Of the remaining 47 stats, 44 reflected a deterioration from previous numbers.

For the Greenback, it was back into the red after two weekly gains. In the week ending 4^th February, the Dollar Spot Index slid by 1.84% to end the week at 95.485. In the week prior, the Index had rallied by 1.70% to 97.270.

Out of the U.S

Manufacturing PMI and ADP nonfarm payrolls were in focus early in the week. It was a weak set of numbers, with the ISM Manufacturing PMI falling from 58.8 to 57.6 and the ADP reporting a 301k fall in nonfarm payrolls.

On Thursday, initial jobless claims fell from 261k to 238k in the week ending 28^th January. Service sector PMI figures were weaker, however, with the ISM Non-Manufacturing PMI falling from 62.3 to 59.9.

The main even of the week, was the release of January’s nonfarm payrolls on Friday. Nonfarm payrolls increased by 467k following a 510k rise in December. In spite of the increase, the unemployment rate rose from 3.9% to 4.0%, as the participation rate climbed from 61.9% to 62.2%.

Out of the UK

It was another quiet week on the economic data front, with finalized private sector PMIs for January in Focus.

The numbers were mixed. In January, the services PMI rose from 53.6 to 54.1, while the manufacturing PMI fell from 57.9 to 57.3. As a result, the composite PMI increased from 53.6 to 54.2.

While the stats drew interest, the Bank of England monetary policy decision was the main event of the week. In line with market expectations, the Bank raised rates by 25 basis points to 0.50%.

In the week, the Pound rose by 0.97% to end the week at $1.3531. The Pound had fallen by 1.12% to $1.3401 in the week prior.

The FTSE100 ended the week down by 0.67%, reversing a 0.37% loss from the previous week.

Out of the Eurozone

It was a particularly busy week for the EUR. Key stats included inflation, private sector PMIs, and German retail sales and factory order numbers.

Prelim inflation figures for January continued to defy the ECB’s transitory view. The Eurozone’s annual rate of inflation picked up from 5.0% to 5.1% in January.

Private sector PMIs were mixed, with service sector activity impacted by the Omicron strain, while manufacturing sector activity accelerated. In January, the Eurozone’s Manufacturing PMI rose from 58.0 to 58.7, while the services PMI declined from 53.1 to 51.1. As a result, the Composite PMI fell from 53.3 to 52.3 in January.

Economic data from Germany did impress in the week, however. A bounce back in private sector activity was accompanied by a fall in the unemployment rate and sharp increase in factory orders.

While the stats provided direction, it was a hawkish ECB that sent the EUR to $1.14 levels in the week.

For the week, the EUR jumped by 2.67% to $1.1449. In the week prior, the EUR had fallen by 1.70% to $1.1151.

The DAX slid by 1.43%, with the CAC40 and the EuroStoxx600 ending the week down by 0.21% and by 0.73% respectively.

For the Loonie

It was a relatively quiet week, with GDP and employment figures the key stats. The stats were skewed to the negative, with the Canadian economy growing at a slower pace in November.

Employment figures had a greater impact, however. In January, Canada’s unemployment rate rose from 6.0% to 6.5% as a result of a 200.1k fall in employment in the month.  Employment had risen by 78.6k in December.

In the week ending 4^th February, the Loonie rose by 0.10% to C$1.2757 against the Greenback. In the week prior, the Loonie had fallen by 1.50% to C$1.2770.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar.

The Aussie Dollar rose by 1.20% to $0.7072, with the Kiwi Dollar rallying by 1.30% to end the week at $0.6633.

For the Aussie Dollar

Retail sales, business confidence, and trade data were the key stats for the week.

The stats were skewed to the negative, with retail sales tumbling by 4.4% and Australia’s trade surplus narrowing. On the positive, however, was a jump in business confidence in the 4^th quarter, delivering support.

While the stats were negative, the RBA ended its bond purchasing program as a result of better-than-expected progress towards full employment and the pickup in inflationary pressure. On cash rates, however, the RBA held back from any suggestions of a near-term rate hike, pegging the Aussie Dollar back from stronger gains in the week.

For the Kiwi Dollar

Trade and employment figures were the key stats in the week, with the stats Kiwi Dollar positive.

In December, New Zealand’s trade deficit narrowed from NZ$1,060m to NZ$477m, with the unemployment rate falling from 3.3% to 3.2% in Q4.

For the Japanese Yen

Finalized private sector PMIs, industrial production, and retail sales were the key stats for the week. The stats were skewed to the negative, with industrial production on the slide in December and the services sector contracting in January.

Retail sales rose by 1.4%, following a 1.9% increase in November. Economists had forecast a 2.7% jump in sales, however.

The Japanese Yen ended the week flat at ¥115.260 against the U.S Dollar. In the week prior, the Yen had fallen by 1.39% to ¥115.260.

Out of China

There were no major stats for the markets to consider, with the markets closed for the Lunar New Year.

In the week ending 28^th January, the Chinese Yuan declined by 0.35% to CNY6.3612. In the week prior, the Yuan had ended the week up by 0.22% to CNY6.3387.

The Hang Seng Index ended the week up by 4.34%.