The Weekly Wrap – Crude Oil, Private Sector PMIs, and COVID-19 Drive the Majors

The Stats

It was a busy week on the economic calendar, in the week ending 24^th April.

A total of 59 stats were monitored, following the 44 stats in the week prior.

Of the 59 stats, 14 came in ahead forecasts, with 43 economic indicators coming up short of forecast. 2 stats were in line with forecasts in the week.

Looking at the numbers, just 11 of the stats reflected an upward trend from previous figures. Of the remaining 48, all 48 stats reflected a deterioration from previous.

For the Greenback, it was another relatively bullish week. The U.S Dollar Spot Index rose 0.60% to 100.380, following 0.30% gain from the previous week.

Economic data, COVID-19 news, economic sentiment, and commodity prices influenced in the week.

Looking at the latest coronavirus numbers.

The total number of coronavirus cases stood at 2,828,575 on Friday, which was up from the previous Friday’s 2,248,037. Week-on-week, the total number of cases increased by 580,538. On a global basis, this was higher than the previous week’s increase of 550,504.

In the U.S, the total rose from 709,201 to 924,996, with France, Germany, Italy, and Spain reporting a combined total of 727,585. Last Friday, the 4 member states had a combined total of 652,639.

Out of the U.S

It was a relatively busy week on the economic calendar, with the economic data skewed to the negative once more.

April’s private sector PMI and weekly jobless claims figures were the main area of interest in the week.

While the manufacturing PMI fell from 48.5 to 36.9, it was the service sector slide from 39.8 to 27.0 which was most alarming.

Hopes of a marked decline in the number of weekly jobless claims were also dashed. In the week ending 17^th April, initial jobless claims surged by another 4.427m…

On Friday, durable goods orders tumbled by 14.4% in March, reversing a 1.2% rise in February.

Things were not much better from the housing sector. Existing home sales slid by 8.5% in March, with new home sales tumbling by 15.4%.

While the stats were skewed to the negative, the Greenback found support as risk aversion gripped the global financial markets.

WTI futures saw an unprecedented fall into negative territory, adding to the market angst in the week.

From a Dollar perspective, the administration’s progress in delivering more fiscal support was also positive.

In the equity markets, the Dow fell by 1.93%, with the NASDAQ and S&P500 declining by 0.18% and 1.32% respectively.

Out of the UK

It was a particularly busy week on the economic calendar.

In the 1^st half of the week, employment and inflation figures were in focus. Through the 2^nd half of the week, it was private sector PMI numbers and retail sales figures.

The stats were skewed to the negative. Inflationary pressures eased, with retail sales tumbling in March.

Service sector activity came to a standstill in April, with the PMI tumbling from 34.5 to 12.3. Manufacturing sector activity was not much better, however, with the PMI falling from 47.8 to 32.9.

Dire economic data, risk aversion, and an upward trend in new coronavirus cases weighed on the Pound.

In the week, the Pound fell by 1.06% to $1.2367. The FTSE100 ended the week down by 0.60%, following on from a 0.95% decline from the previous week.

Out of the Eurozone

It was a busy week economic data front, with the stats heavily skewed to the negative.

In the 1^st half of the week, April’s ZEW Economic Sentiment figures for Germany and the Eurozone caught the markets off-guard.

Both rebounded back into positive territory, reflecting the economist view that a v-shaped rebound is to be expected.

That was the only optimism, however, with consumer and business confidence taking a hit.

Germany’s GfK Consumer Climate and IFO Business Climate Index both fell to record lows.

Things were no better across the private sector. April’s prelim service sector PMIs for France, Germany, and the Eurozone fell to record lows. Manufacturing PMIs also continued to decline.

With the economic data negative, EU ministers also failed to deliver a long-term aid package, which pinned the EUR back on Thursday.

Limiting the downside, however, was easing of lockdown measures in Germany, with Italy and France to follow.

For the week, the EUR fell by 0.48% to $1.0823, following on from a 0.57% decline from the previous week.

For the European major indexes, it was a bearish week. The DAX30 and CAC40 slid by 2.73% and by 2.35% respectively, while the EuroStoxx600 fell by 1.16%.

Elsewhere

It was another mixed week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 24^th April, the Aussie Dollar rose by 0.08% to $0.6371, while the Kiwi Dollar fell by 0.30% to $0.6017.

For the Aussie Dollar

It was a particularly quiet week for the Aussie Dollar on the economic data front.

There were no material stats to provide the Aussie Dollar with direction. The lack of stats left the Aussie in the hands of the RBA meeting minutes on Tuesday that delivered support.

While not hawkish, the minutes suggested that the RBA will stand pat on policy near-term, which provided the support.

Any upside was limited, however, with commodities under pressure.

For the Kiwi Dollar

It was a busier week on the economic calendar. 1^st quarter inflation figures provided support at the start of the week, with the annual rate of inflation picking up to 2.5%.

Talks of easing containment measures also limited the downside for the Kiwi Dollar in the week.

Risk aversion mid-week and a slide in the GlobalDairyTrade Index on Tuesday weighed on the Kiwi, however.

For the Loonie

It was a relatively busy week on the economic calendar, with the stats skewed to the negative.

In March, inflationary pressures eased, with the annual rate of inflation falling from 1.8% to 1.6%.

February retail sales and Wholesale sales figures had a muted impact on the Loonie, however.

Crude oil prices ultimately did the damage, with a WTI slide into negative territory sending the Loonie to C$1.42 levels on Tuesday.

The Loonie fell by 0.73% to end the week at C$1.4103, with a pickup in crude oil prices late in the week limiting the damage.

For the Japanese Yen

It was a relatively busy week on the data front. March trade and inflation figures and April private sector PMIs were in focus, with all the stats negative.

In March, the trade surplus narrowed from ¥1,108.88bn to ¥4.9bn, with exports sliding by 11.7%. Inflationary pressures also eased, with the annual rate of core inflation easing from 0.6% to 0.4%.

Things were not much better across the private sector in April. While the manufacturing PMI fell from 44.8 to 43.7, the Services PMI tumbled from 33.8 to 22.8.

Negative stats and an increase in the number of new coronavirus cases limited demand for the Yen, in spite of risk aversion in the week.

The Japanese Yen rose by just 0.03% to end the week at ¥107.51. In the week prior, the Yen had risen by 0.86% against the U.S Dollar.

Out of China

It was a quiet week on the economic data front.

There were no material stats out of China to provide direction. At the start of the week, the PBoC cut both 1-year and 5-year loan prime rates, however, to provide support.

The 1-year LPR was cut from 4.05% to 3.85%, with the PBoC cutting the 5-year by 10 basis points to 4.65%.

In spite of further monetary policy support and the assurance of more, the moves failed to support the equity markets.

The Yuan also remained under pressure as concerns linger over China’s economic outlook.

In the week ending 24^th April, the Yuan fell by 0.11% to CNY7.0815 against the Greenback.

The CSI300 and Hang Seng ending the week down by 1.11% and 2.25% respectively.