The Weekly Wrap – Positive Stats Battled Against Trump and the HK Bill

The Stats

It was a busy week on the economic calendar in the week ending 29^th November.

A total of 60 stats were monitored, following 40 stats from the week prior.

Of the 60 stats, 27 came in ahead forecasts, while 22 economic indicators came up short of forecast. 11 stats were in line with forecasts in the week.

Looking at the numbers, 35 of the stats reflected an upward trend from previous figures. Of the remaining 25, 20 stats reflected a deterioration from previous.

While the stats were skewed to the positive and economic data out of the U.S provided support, the Greenback ended the week flat at 98.273. Negative sentiment towards trade in the 2^nd half of the week pinned back the Dollar.

Out of the U.S

It was a relatively busy week on the economic calendar. Economic data included trade data and consumer confidence figures on Tuesday ahead of a busy Wednesday.

While consumer confidence was on the rise in the Eurozone, confidence in the U.S eased marginally. The CB Consumer Confidence Index slipped from 126.1 to 125.5.

A narrowing in the goods trade balance and a slide in new home sales had a muted impact on the day.

On Wednesday, October durable goods orders and inflation figures, and 3^rd quarter GDP numbers provided support.

Better than expected GDP numbers out of the U.S and rise in durable goods orders provided Dollar support on Wednesday.

According to 3^rd estimate figures, the U.S economy grew by 2.1% in the 3^rd quarter, upwardly revised from the 2^nd estimate of 1.9%.

Core durable goods and durable goods orders both rose by 0.6%, month-on-month, in October.

If there were any fears of a U.S recession, recent economic data out of the U.S suggests otherwise, in spite of the manufacturing sector woes.

Personal spending, the weekly jobless claims and the Chicago PMI for November were also skewed in favor of the Dollar.

Easing inflationary pressures and a fall in pending home sales were the only negatives on the day.

The core PCE Price Index was up by 1.6%, year-on-year, easing from 1.7% in September. Pending home sales fell by 1.7% in October, reversing a 1.5% rise from September.

Outside of the numbers, updates from trade talks continued to influence.

Positive updates from U.S President Trump on trade talks on Tuesday supported risk appetite early in the week.

Trump’s signing of the HK Bills to support HK protesters weighed in the 2^nd half of the week, however.

There was no major sell-off in spite of the Bills, with the markets awaiting China’s response…

In the equity markets, the NASDAQ rose by 1.71% in the week to lead the way. The Dow and S&P500 saw more modest gains of 0.63% and 0.99% respectively.

Out of the UK

It was also a particularly quiet week on the economic calendar.

There were no material stats to provide direction in the Pound, leaving the UK general election in focus.

Mixed results from the opinion polls from last weekend and from Tuesday provided direction, as did the news wires.

Racism took center stage in the week, with Corbyn coming under fire after failing to apologies for anti-Semitism claims in a BBC interview on Tuesday.

Things were not much better for the Tories, as accusations of Islamicphobia did the rounds…

Later in the week, there was some upside for the Pound as YouGov released its own predictions for the election which favored the Tories. YouGov predictions had the Tories with 359 seats and Labour with 211…

The Pound rose by 0.71% to $1.2925 in the week

For the FTSE100, negative sentiment towards trade failed to sink the 100, in spite of a 0.94% fall on Friday. The index ended the week up by 0.27%.

Out of the Eurozone

It was a busy week on the economic data front.

In the first half of the week, economic data was limited to German business and consumer confidence figures and French consumer confidence and jobseeker figures.

There was some good news for the EUR early in the week, with both business and consumer confidence seeing a pickup.

Reliance on consumer confidence had left the EUR more sensitive to consumer confidence numbers of late.

In Germany, the GfK consumer climate index rose from 9.6 to 9.7. Out of France, the consumer confidence index rose from 104 to 106.

Outside of the numbers, UK politics and U.S – China trade talks also influenced in the early part of the week.

A relatively quiet day on Thursday, with stats limited to Spanish and German prelim inflation figures, left the EUR flat ahead of a busy end to the week.

On Friday, economic data out of Germany was mixed.

While retail sales slumped by 1.9% in October, unemployment fell by 16k in November, providing much-needed support.

Out of France, consumer spending rose by 0.2% in October, partially reversing a 0.3% slide in September.

For the Eurozone, the unemployment rate fell from an upwardly revised 7.6% to 7.5%.

Finalized 3^rd quarter GDP numbers and prelim November inflation figures for Italy and the Eurozone had a muted impact on the EUR on the day.

There was no upside for the EUR inspire of a pickup in inflationary pressure. With the manufacturing sector in contraction, inflation is unlikely to have a material influence on ECB policy near-term.

The EUR ended the week down 0.03% to $1.1018.

For the European major indexes, the EuroStoxx600 led the way, rising by 0.85%. The DAX30 and CAC40 rose by 0.55% and 0.20% respectively.

Elsewhere

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

The Aussie Dollar fell by 0.34% to $0.6763, while the Kiwi Dollar rose by 0.19% to $0.6422.

For the Aussie Dollar

It was a relatively quiet week.

On Wednesday, 3^rd quarter ‘construction work done’ figures provided little support, with a 0.4% fall. In the 2^nd quarter, ‘construction work done’ had fallen by 3.8%. Economists had forecast a 1% decline.

Things were no better in the 2^nd half of the week. Private new CAPEX fell by 0.2% in the 3^rd quarter, following on from a 0.5% fall in the 2^nd.

Demand for private sector credit also disappointed, with a 0.1% rise in October, falling short of a forecasted 0.3% increase. Personal credit and business credit both fell in the month to pin back the headline number.

From elsewhere, a 9.9% slide in Chinese industrial profits in October (year-on-year) certainly didn’t help on Wednesday.

On the trade front, negative sentiment towards trade in the 2^nd half of the week also contributed to the downside.

For the Kiwi Dollar

It was a busy start to the week on the economic colander.

Economic data included to 3^rd quarter retail sales figures and October trade data.

On Tuesday, NZ Stats reported a 1.6% rise in retail sales in the 3^rd quarter, following a 0.2% rise in the 2^nd. Core retail sales also impressed, with a 1.8% gain.

Trade data on Wednesday failed to provide support, however, in spite of a narrowing in the deficit from NZ$5,330m to NZ$5,040m.

On Thursday, a pickup in business confidence in November did provide support, however. The ANZ Business Confidence Index rose from -42.4 to -26.4 in the month.

At the end of the week, building consent figures had a muted impact on the Kiwi, in spite of a 1.1% decline. The pullback was marginal following a 7.4% surge in September.

Of note in the week was the Kiwi Dollar’s lack of sensitivity towards Trump’s signing of the HK bill and sentiment towards the U.S – China trade war in general…

For the Loonie

It was a quiet 1^st half of the week for the Loonie, with stats limited to September wholesale sales figures.

A 1.0% rise in sales, which came in ahead of a forecasted 0.3% rise, failed to provide support on Monday.

The Loonie was on the back foot, with economic data from the U.S and positive updates on trade giving the greenback the edge.

An early end to the national rail strike on Tuesday also failed to provide support…

Things were not much better at the end of the week, with 3^rd quarter GDP and October RMPI numbers weighing.

In the 3^rd quarter, the economy grew by 0.3% quarter-on-quarter, slowing from 0.9% in the 2^nd.

Year-on-year, the economy grew by 1.65%, down from 1.93% in the 2^nd.

Annualized numbers also failed to impress, with the economy growing by 1.3%, down from 3.5% in the 2^nd quarter.

In October, the RMPI fell by 1.9%, after coming in flat in September.

With the BoC in action next week, the latest figures will be food for thought for a Committee somewhat mixed on the policy front.

For the week, the Loonie fell by 0.61% to CAD1.3282 against the Greenback.

For the Japanese Yen

It was a particularly quiet start to the week on the data front, with no material stats to provide direction.

Through the 2^nd half of the week, however, retail sales, inflation, and industrial production were in focus.

In October, retail sales slid by 7.1%, partially reversing a 9.2% spike in September, with industrial production falling by 4.2%. In September, production had risen by 1.7%.

While the retail sales figures were palatable, with the World Cup Rugby influencing, the production figures were not…

On the inflation front, a pickup in the Tokyo core annual rate of inflation to 0.6% was of little consolation.

The Japanese Yen fell by 0.76% to ¥109.49, against the U.S Dollar. The loss came in spite of the negative sentiment towards trade late in the week.

Out of China

It was a quiet week on the economic data front.

Industrial profit figures on Wednesday garnered plenty of attention. Profits slid by 9.9% year-on-year. In September, industrial profits had fallen by 5.3%…

On Saturday morning, November private sector PMI numbers were positive, however.

The NBS Manufacturing PMI rose from 49.3 to 50.2, with the non-manufacturing PMI rising from 52.8 to 54.4.

A return to expansion in the manufacturing sector and pickup in service sector activity will provide some much-needed support to riskier assets at the start of the week.

On the geopolitical front, the U.S and China made further progress towards a phase 1 agreement.

Trump’s signing of the HK bills, however, weighed on risk appetite in the 2^nd half of the week…

The CSI300 fell by 0.55% in the week, with a 0.87% slide on Friday leaving the index in the red. The Yuan also hit reverse, ending the week down 0.09% to CNY7.0325 against the Greenback.