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Bob Mason
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The Stats

It was a particularly busy economic calendar in the week ending 15th November.

A total of 75 stats were monitored throughout the week, following just 51 stats from the week prior.

Of the 75 stats, 25 came in ahead forecasts, with 36 economic indicators coming up short of forecast. 14 stats were in line with forecasts in the week.

Looking at the numbers, 30 of the stats reflected an upward trend from previous figures. Of the remaining 45, 34 stats reflected a deterioration from previous.

With stats skewed to the negative and mixed sentiment towards trade, the Dollar was on the back foot.

For the week, U.S Dollar Index (“DXY”) fell by 0.36% to $97.999.


Out of the U.S

It was a relatively busy week. Economic data included October inflation and wholesale inflation figures released on Wednesday and Thursday.

While the core annual rate of inflation eased from 2.4% to 2.3%, core consumer prices rose by 0.2% in October. Economists forecasted a 0.2% rise following a 0.1% rise in September.

Consumer prices were also on the rise, with the consumer price index rising by 0.4% in October, month-on-month. In September, consumer prices had risen by just 0.1%.

Wholesale inflation got a boost in October, with the Producer Price Index rising by 0.4%. In September, the PPI had fallen by 0.3%. The Core Producer Price Index rose by 0.3%, reversing a 0.3% decline from September.

Key for the week, however, were stats out of the U.S on Friday.

October retail sales figures were the main driver. Retail sales rose by 0.3%, month-on-month. Economists had forecasted a 0.2% increase.

Core retail sales rose by 0.2%, however, falling short of a forecasted 0.4% rise following a 0.1% decline in September.

Industrial production figures also got some interest, with production falling by 0.8% in October, following a 0.4% fall in September. Economists had forecasted a 0.4% decline.

The weekly jobless claims, business inventories, and import and export price index figures had a muted impact on the Dollar.

A late slide on Friday left the Greenback in the red for the week. While there was the hope of a breakthrough on a U.S – China trade agreement, the FX world thought otherwise.

Outside of the stats

Mixed updates from the U.S administration continued to jostle the Greenback.

On Tuesday, U.S President Trump spoke at the Economic Club in New York. During the speech, Trump stated that, while the U.S and China were close to a phase 1 agreement, failure by China to agree to America’s demands would lead to even more punitive tariffs.

Expectations are for a Phase 1 agreement to be signed, though whether any tariffs will be rolled back remains to be seen.

On Wednesday, FED Chair Powell gave testimony to Congress. There was little reaction to the testimony, however, with Powell stating that there would not be any further rate cuts unless the economy sees a material slowdown in growth.

Powell also said that the U.S economy continues to grow at a solid pace while facing risks from trade and slower growth from elsewhere.

In the equity markets, the Dow rose by 1.17%, with the S&P500 and NASDAQ gaining 0.89% and by 0.77% respectively.

Out of the UK

It was a particularly busy week on the economic calendar.

Key stats included GDP, trade and production figures on Monday, employment figures on Tuesday, and inflation numbers on Wednesday.

The UK economy contracted in September, month-on-month, with the GDP falling by 0.1%. Quarter-on-quarter, however, the GDP rose by 0.3%, falling short of a forecasted 0.4% rise.

Year-on-year, the GDP rose by just 1.00%, falling short of a forecast of 1.10%. In the 2nd quarter, the economy had grown by 1.30%.

Trade data and production figures were also negative for the Pound. In September, industrial production fell by 0.3%, following a 0.7% decline in August. Manufacturing production fell by 0.4%, off the back of a 0.7% slide in August.

On the trade front, the trade deficit widened from 10.83bn to £12.54bn, with the non-EU deficit widening from £3.23bn to £4.03bn.

On Tuesday, employment figures were mixed. While the unemployment rate fell from 3.9% to 3.8% in September, Claimant counts jumped by 33k in October. Off the back of a 13.5k rise in September, the latest figures suggest that the fall in the unemployment rate would be temporary.

Also negative on the day was wage growth, which slowed from 3.7% to 3.6% in September.

On Wednesday, inflationary pressures also eased, with the annual rate of inflation easing from 1.7% to 1.5%.

Month-on-month, consumer prices fell by 0.2%, reversing a 0.1% rise in August. With the Producer Price Input Index falling by 1.3%, off the back of a 0.9% fall in August, the weak numbers supported the more dovish BoE vote count from last week.

Wrapping up a negative week on the data front were weak retail sales figures.

Month-on-month, retail sales fell by 0.1%, with core retail sales sliding by 0.3%. Economists had forecasted rises of 0.2%.

General Election Update

While the stats were skewed to the negative, support for the Pound came from election news on the week.

A jump in the Pound on Monday came from an announcement by Brexit Party leader Farage that he would not compete with the Tories’ for their existing 317 seats.

Looking at the latest YouGov opinion polls, the Conservative Party had 42% of the vote in the 11-12th November poll. The Labour Party sat a distant second, with 28%, with the Lib Dems at 15%.

The Tories have seen their margin widen from the previous week’s 39%, with widening attributed to the latest Brexit Party move to ensure an orderly departure from the EU.

The Pound rose by 0.96% to $1.2897 in the week.

For the FTSE100, negative sentiment towards trade early in the week and a stronger Pound weighed. The FTSE100 was fell by 0.77%.

Out of the Eurozone

It was a relatively busy week on the economic data front.

Early in the week, key stats included November’s ZEW current conditions and economic sentiment figures for Germany and the Eurozone.

The sentiment towards the economy certainly improved in November. Germany’s Economic Sentiment Index jumped from -22.8 to -2.1, with the Eurozone’s up from -23.5 to -1.0.

Sentiment towards current conditions continued to send a dire message, however, with the index rising from -25.3 to -24.7.

The jump in the sentiment figures was attributed to progress between the U.S and China on trade talks. Expectations of Britain departing the EU with a deal and easing concerns of U.S tariffs on the EU also provided support.

On Wednesday, the Eurozone’s industrial production figures failed to provide support, with production up by 0.1%. Economists had forecast a 0.3% fall following August’s 0.4% rise.

On Thursday, 1st estimate GDP numbers out of Germany came in better than expected. A downward revision to 2nd quarter numbers offset the positive numbers, however.

For the Eurozone, Germany’s GDP numbers supported an upward revision to the Eurozone’s year-on-year GDP number. The Eurozone economy grew by 1.2%, which was at the same pace as in the 2nd quarter.

On Friday, the Eurozone’s trade surplus widened from €14.7bn to €18.7bn, providing further support. Economists had forecasted a widening to €17.5bn.

In the week, finalized October inflation figures out of the Eurozone and member states had a muted impact on the EUR and the majors.

For the week, the EUR rose by 0.3% to $1.1051, reversing losses from earlier in the week

For the European major indexes, the CAC40 led the way, rising by 0.84%. The EuroStoxx600 and DAX30 rose by just 0.15% and 0.10% respectively.


It was back in the red for the Aussie Dollar, while the Kiwi Dollar found much-needed support.

The Aussie Dollar fell by 0.67% to $0.6817, while the Kiwi Dollar rose by 1.20% to $0.6404.

For the Aussie Dollar

It was a relatively quiet start to the week for the Aussie Dollar.

Key stats included business and consumer confidence figures and 3rd quarter wage growth.

In October, the NAB Business Confidence Index rose by 2 points to +2, with consumer confidence rising by 4.5% in November. In October, the consumer confidence index had fallen by 5.5%.

While the numbers were positive, the sub-indexes raised some red flags.

Unemployment expectations were on the rise in November, with the time to buy a major household item sitting well below August levels going into the holiday season.

A rise in sentiment towards the economy in the next year and next 5-years also failed to impress in spite of monthly increases. Both remained well below numbers from a year ago.

Wage growth also failed to impress. Wages grew by 0.5% in the 3rd quarter, slowing from 0.6% in the 2nd quarter.

While tepid wage growth and consumer confidence figures support the RBA’s concerns, the improvement in consumer confidence was attributed to the RBA’s hold on rates.

This affirms the RBA’s concerns over the impact of rate cuts on consumer confidence and spending…

While the numbers were skewed to the positive, the devil was in the details, which were less impressive.

On Thursday, employment numbers sank the Aussie Dollar, with employment falling by 19k. The fall in employment led to a rise in the unemployment rate from 5.2% to 5.3%.

Economic data out of China also pressured the Aussie Dollar on Thursday. Industrial production rose by just 4.7% in October, slowing from 5.8% in September.

Concerns over the prospects of a phase 1 trade agreement and whether it would alleviate pressure on global trade terms tested risk appetite and the commodity currencies.

In spite of the concerns over the prospect of a phase 1 agreement, Greenback weakness provided some support on Friday.

For the Kiwi Dollar

It was a busier start to the week on the economic calendar.

On Monday, electronic card retail sales disappointed, with sales falling by 0.6% month-on-month, in October. In September sales had risen by 0.4%.

Inflation expectations also continued to soften, with inflation expectations for 2-years out easing from 1.86% to 1.80%.

While the stats were skewed to the negative, the RBNZ monetary policy decision delivered the upside for the Kiwi.

On Wednesday, the RBNZ held rates unchanged at 1.00%. Some uncertainty over whether the RBNZ would cut rates again had left the Kiwi back at $0.63 levels.

At the end of the week, the Business PMI jumped from 48.4 to 52.6 in October, providing further support to the Kiwi Dollar.

For the Loonie

It was a quiet week for the Loonie.

Economic data was limited to September house prices and foreign securities purchases that had a muted impact on the Loonie.

The Loonie remained in the hands of market risk appetite and crude oil prices.

On Friday, the Loonie found much-needed support following news of the PBoC injecting CNY200bn into the system.

News at the end of the week of progress in trade talks also provided support.

The Loonie ended the week up by 0.04% to C$1.3223 against the Greenback.

For the Japanese Yen

3rd quarter GDP numbers on Thursday and finalized September industrial production figures on Friday delivered mixed results.

In the 3rd quarter, the Japanese economy grew by just 0.2%, year-on-year, slowing from 1.4% in the 2nd quarter. Quarter-on-quarter, the economy grew by 0.1%, slowing from 0.4% in the 2nd quarter.

Industrial production figures impressed, however, with production rising by 1.7% in September. Production had risen by 1.4% according to prelim figures.

In spite of the mixed numbers, chatter on trade continued to be the key driver in the week.

The Japanese Yen rose by 0.42% to ¥108.8 against the U.S Dollar.

Out of China

It was also a relatively quiet week on the economic data front.

The markets needed to wait until Thursday for key stats that included industrial production and retail sales figures.

In October industrial production rose by 4.7%, slowing from 5.8% growth in September.

Retail sales also disappointed, with sales rising by 7.2% year-on-year, slowing from 7.8% in September.

While fixed asset investments also came in softer, down from a 5.4% rise to 5.2% in September, unemployment fell from 5.2% to 5.1%.

Unrest in HK was also a factor throughout the week, with violence escalating through the week.

The CSI300 slid by 2.41% in the week, with the Yuan falling by 0.24% to CNY7.0094 against the Greenback.

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