U.S – China tensions, Iran, and April PMIs to Weigh on Riskier Assets

Earlier in the Day:

It was a relatively quiet start to the week on the economic calendar this morning. The Aussie Dollar was in action in the early part of the day.

Risk sentiment took an early hit as the markets reacted to rising tensions between the U.S and China. The blame game has begun as the U.S President looks to shirk responsibility for the spread of the pandemic across the U.S.

Looking at the latest coronavirus numbers,

On Sunday, the number of new coronavirus cases rose by 80,636 to 3,565,119. On Saturday, the number of new cases had risen by 91,765. While down from Saturday, this was up marginally from a 71,251 increase on the previous Sunday.

France, Germany, Italy, and Spain reported 3,938 new cases on Sunday, which was down from 6,419 new cases on Saturday. France and Germany reported just 297 and 697 news cases respectively.

From the U.S, the total number of cases rose by 27,348 to 1,188,122 on Sunday. On Saturday, the total number of cases had risen by 31,714. On Sunday, 26^th April, the total new number of cases had risen by 26,157.

For the Aussie Dollar

Building approvals fell by 4.0% in March. In February, approvals had surged by 19.9%. Real estate sector analysts will be talking about how the sector was on the up ahead of the COVID-19 pandemic.

Ultimately, however, the stats had a muted impact as the markets responded to rising tensions between the U.S and China and Iran.

The Aussie Dollar moved from $0.63912 to $0.63907 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.31% to $0.6398.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.20% to ¥106.70 against the U.S Dollar, while the Kiwi Dollar was down by 0.46% to $0.6035.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Following Friday’s close, April manufacturing PMIs for Italy and Spain are in focus.

Finalized PMI numbers from France, Germany, and Spain are also due out.

While we can expect downward revisions to prelim numbers, Spain and Italy’s numbers will likely alarm the markets.

Ultimately, however, the markets are expecting some quite dire numbers that should limit the downside for the EUR.

Expect the latest COVID-19 numbers and updates on the effectiveness of treatment drug remdesivir to remain key drivers.

Fresh tensions between the U.S and China, will likely also draw plenty of attention throughout the day.

At the time of writing, the EUR was down by 0.33% to $1.0945, with risk aversion weighing early on.

For the Pound

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out of the UK today.

The lack of stats puts COVID-19 numbers and geopolitics front and center.

Last week, the government announced plans to release the blueprint for an easing to lockdown measures at the start of the week.

In spite of an upward trend in new cases, the government announced last week that the COVID-19 peak had passed.

Also in focus will be early chatter from UK – U.S trade talks that commence on Monday. Trump will be looking to get the EU hot under the collar… That must be Pound positive.

At the time of writing, the Pound was down by 0.30% to $1.2468, with tensions between the U.S and China weighing.

Across the Pond

It’s a quiet day ahead on the U.S economic calendar. Key stats are limited to March factory order figures.

We’ve seen the 1^st quarter GDP numbers and now we will see economic data that could deliver downward revisions.

Outside of the numbers, there’s also a pickup in geopolitical risk that needs consideration. China may not appreciate the latest accusations not to mention the threat of sanctions…

The Dollar Spot Index was up by 0.23% to 99.308 at the time of writing.

For the Loonie

It’s a quiet day on the economic calendar, with no material stats to provide direction on the day.

The lack of stats will leave the Loonie in the hands of market risk sentiment on the day.

At the time of writing, the Loonie was down by 0.16% to C$1.4112 against the U.S Dollar, at the time of writing.