The Weekly Wrap – Economic Data and COVID-19 Continued to Girate the MarketsPositive economic data and news of progress towards a successful COVID-19 treatment drug largely overshadowed spikes COVID-19 cases.
It was a relatively quiet week on the economic calendar, in the week ending 10th July.
A total of just 30 stats were monitored, following the 74 stats from the week prior.
Of the 30 stats, 20 came in ahead forecasts, with 9 economic indicators coming up short of forecast. 1 stats were in line with forecasts in the week.
Looking at the numbers, 24 of the stats reflected an upward trend from previous figures. Of the remaining 6, all 6 stats reflected a deterioration from previous.
For the Greenback, it was a 3rd consecutive week in the red. In the week ending 10th July, the Dollar Spot Index fell by 0.54% to 96.652. In the week prior, the Dollar had fallen by 0.27%.
COVID-19 updates drew greater focus, with a lighter economic calendar unable to distract the markets.
For the U.S, the daily COVID-19 numbers continued to spike to fresh highs in the week. At the end of the week, news of progress towards a successful treatment drug delivered riskier assets with support, however.
Looking at the latest coronavirus numbers
At the time of writing, the total number of coronavirus cases stood at 12,604,895 for Friday, rising from last Friday’s 11,175,074 total cases. Week-on-week (Saturday thru Friday), the total number of cases was up by 1,429,821 on a global basis. This was higher than the previous week’s increase of 1,290,881 in new cases.
In the U.S, the total rose by 399,290 to 3,285,550. In the week prior, the total number of new cases had risen by 338,384. An upward trend was evident throughout the week once more.
Across Germany, Italy, and Spain combined, the total number of new cases increased by 7,406 to bring total infections to 743,215. In the previous week, the total number of new cases had risen by 6,464.
Out of the U.S
It was a relatively quiet week on the economic data front.
Key stats included June’s ISM Non-Manufacturing PMI, May’s JOLT’s job openings, and the weekly jobless claims.
The stats were skewed to the positive, with the U.S non-manufacturing sector expanding in June.
On the labor market front, JOLTs job openings increased from 4.996m to 5.397m. More importantly, the weekly initial jobless claims rose by 1.314m in the week ending 3rd July. This was down from 1.413m in the week prior.
While the stats were positive, COVID-19 updates from the U.S were particularly dire, providing the Greenback with some support.
In the equity markets, the NASDAQ rallied by 4.01%, with the Dow and S&P500 gaining 0.96% and 1.76% respectively.
Out of the UK
It was also a relatively quiet week on the economic calendar. June’s construction PMI, 1st quarter labor productivity, and house prices were in focus.
A sharp rebound in construction sector activity was positive, with the PMI jumping from 28.9 to 55.3.
House prices also bottomed out, with news of an adjustment to stamp duty thresholds also positive for the sector.
Ultimately, however, it was Brexit chatter that provided the Pound with support in the week.
Following the curtailed talks from the previous week, the EU hinted at a willingness to compromise, raising hopes of a deal.
In the week, the Pound rose by 1.11% to $1.2622, following a 1.19% gain in the previous week. The FTSE100 ended the week down by 1.01%, with a 1.73% slide on Thursday delivering the loss.
Out of the Eurozone
It was a relatively busy week economic data front, with Germany in focus.
Germany’s factory orders, industrial production and trade data for May were in focus in the week. On Friday, French and Italian production figures caught the market’s attention.
From Germany, the stats were skewed to the negative based on forecasts. Both factory orders and industrial production rose by less than forecast.
Germany’s trade balance came in ahead of forecasts, which provided some support.
Construction figures from Germany and the Eurozone’s retail sales figures for May had a muted impact in the week.
At the end of the week, industrial production figures from France and Italy delivered a boost.
For the week, the EUR rose by 0.46% to $1.1300, following a 0.26% gain from the previous week.
For the European major indexes, it was a mixed week. The CAC30 fell by 0.73%, while the DAX30 and EuroStoxx600 saw gains of 1.15% and 0.38% respectively.
For the Loonie
It was a relatively busy week on the economic calendar.
Key stats included June’s Ivey PMI, housing data, and the all-important employment figures for June.
The stats were skewed to the positive. The Ivey PMI jumped from 39.1 to 58.2 in June. More impressively, employment jumped by 952,900 following a 289,600 rise in May.
As a result of the jump in hiring, the unemployment rate fell from 13.7% to 12.3%.
While the stats were skewed to the positive, COVID-19 jitters and a negative monthly IEA report weighed.
The Loonie fell by 0.33% to end the week at C$1.3592 against the Greenback. In the week prior, the Loonie had risen by 0.27%.
It was a relatively bullish week for the Aussie Dollar and the Kiwi Dollar.
In the week ending 10th July, the Aussie Dollar rose by 0.16% to $0.6950, with the Kiwi Dollar rising by 0.66% to $0.6574.
For the Aussie Dollar
It was a particularly quiet week for the Aussie Dollar, with no material stats to provide direction.
While there were no stats, the RBA was in action on Tuesday, standing pat on monetary policy. This was in line with market expectations, limiting any major moves by the Aussie Dollar.
In the week, the government closed down the border between Victoria and New South Wales due to fresh new cases…The latest spread pinned the Aussie Dollar back in the week.
For the Kiwi Dollar
It was also a relatively quiet week on the economic data front.
Key stats were limited to 2nd quarter business confidence figures and June electronic card retail sales figures.
While both were Kiwi Dollar positive, there was nothing impressive to give the Kiwi a major boost.
For the Japanese Yen
It was a quiet week on the data front.
Household spending figures for May delivered more bad news early in the week. Year-on-year, household spending was down by 16.2%, following an 11.1% decline in April.
Month-on-month, spending fell by 0.1%, following a 6.2% slide in April. In contrast to other economies, consumers appeared unwilling to loosen the purse strings, which will be of concern for the government.
While the stats were negative, concerns over COVID-19 delivered the upside for the Yen in the week.
The Japanese Yen rose by 0.54% to end the week at ¥106.93 against the Greenback. In the week prior, the Yen had fallen by 0.27% against the U.S Dollar.
Out of China
It was a quiet week on the economic data front, with June inflation figures in focus.
The stats were skewed to the positive, though ultimately of little influence.
A lack of chatter from Washington and Beijing allowed the markets to move beyond the recent war of words.
Tensions over Hong Kong are unlikely to abate anytime soon, however. Positive sentiment towards an economic rebound in China drove demand for equities in the week.
News had also hit the wires in the early part of the week of a reported priority to foster a “healthy” bull market.
In the week ending 10th July, the Chinese Yuan rose by 0.95% to end the week at CNY6.9994 against the Greenback.
The CSI300 rallied by 7.55% in the week, with the Hang Seng gaining 1.40%.