U.S Inflation and Personal Spending Places the USD in the Spotlight

It’s all eyes on personal spending and inflation figures out of the U.S this afternoon. With the FED delivering on Wednesday, will today’s figures influence?
Bob Mason
Arms trade business concept.

Earlier in the Day:

There were no material stats released through the Asian session this morning.

A lack of stats left the Asian markets to respond to Friday’s economic data out of the U.S.

Across the Majors

At the time of writing, Kiwi Dollar was up 0.24% to $0.6678, with the Aussie Dollar was up 0.20% to $0.7056. Support early on came from the U.S stats from Friday. While the U.S economy grew by 3.2%, consumption and investment slumped, pinning back the greenback.

For the Japanese Yen, it was a flat start to the day, with the Yen down 0.02% to ¥111.60 against the U.S Dollar. Volumes were on the lighter side for the Yen, with Japanese markets closed for the week.

In the equity markets

At the time of writing, the Hang Seng and CSI300 were up by 0.76% and by 0.78% respectively, while the ASX200 was down 0.50%. While hopes of a resolution to the U.S – China trade war supported HK and Chinese stocks, the ASX200 failed to find support from the gains in the U.S on Friday.

On the ASX200, bank stocks were amongst the heavy losers on the day, with the big 4 weighing through the session.

The Day Ahead:

For the EUR

There are no material stats due out of the Eurozone to provide direction through the day. With no material stats, the markets will consider Eurozone business confidence and economic sentiment figures due out later this morning.

Last week we saw the EUR’s sensitivity to the disappointing consumer confidence figures. We can expect the same today.

On the corporate earnings front, with no major corporate earnings releases out of the EU, Alphabet Inc. earnings later in the day could influence risk appetite.

Following last week’s GDP numbers out of the U.S, U.S inflation and personal spending figures due out this afternoon will set the tone ahead of Wednesday.

At the time of writing, the EUR was up 0.06% at $1.1158.

For the Pound

There are no material stats due out of the UK today to provide the Pound with direction. A lack of stats leaves the Pound in the hands of Brexit chatter through the day.

Chatter from the weekend was more about gaining power than delivering a deal. The Pound could begin to struggle should there be a continued lack of progress on Brexit. The EU elections are rapidly approaching.

At the time of writing, the Pound was up 0.12% to $1.2932.

Across the Pond

Personal spending and the FED’s preferred Core PCE Price Index figures are due out this afternoon.

We can expect the Dollar to be particularly sensitive to the stats. Following the 1st quarter GDP figures on Friday, the market continues to price in a FED rate cut later in the year. Inflationary pressures have abated and consumption and investment slumped in the 1st quarter.

Any contrarian numbers later today and we can see the Dollar rally resume.

Outside of the stats, U.S corporate earnings will also be in focus. Alphabet Inc earnings will be of influence to risk appetite later in the day.

At the time of writing, the Dollar Spot Index was down by 0.04% to 97.964.

For the Loonie

It’s a quiet day on the economic calendar. Market risk sentiment will be the key driver. We can expect some influence from crude oil prices later in the day, however.

The Loonie was up 0.02% at C$1.3452, against the U.S Dollar, at the time of writing, the gains coming in spite of a pullback in crude oil prices.

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