Earlier in the Day:
It was another busy start to the day on the economic calendar on Wednesday. The Aussie Dollar, Kiwi Dollar, and the Japanese Yen were in action early in the day. There were also stats from China for the markets to also consider.
Away from the economic calendar, there was yet another spike in new COVID-19 cases in the U.S. In spite of the continued spread, there was no major reaction from the markets early on in the day. Fiscal and monetary policy support is expected to continue to roll in. This has continued to support the demand for riskier assets.
Looking at the latest coronavirus numbers
On Tuesday, the number of new coronavirus cases rose by 201,507 to 10,583,878. On Monday, the number of new cases had risen by 153,341. The daily increase was higher than Monday’s rise and up from 158,646 new cases from the previous Tuesday.
Germany, Italy, and Spain reported 934 new cases on Tuesday, which was up from 803 new cases on Monday. On the previous Tuesday, 952 new cases had been reported.
From the U.S, the total number of cases rose by 53,471 to 2,727,853 on Tuesday. On Monday, the total number of cases had risen by 41,940. On Tuesday, 23rd June, a total of 34,399 new cases had been reported.
For the Japanese Yen
2nd quarter Tankan figures were in focus in the early part of the day:
- All Big Industry CAPEX Index increased by 3.2%, following a 1.8% rise in the 1st quarter. Economists had forecast a 2.1% gain.
- Big Manufacturing Outlook Index slid by 27%, off the back of an 11% decline in the 1st quarter. Economists had forecast a 24% tumble.
- The Large Manufactures Index tumbled by 34%, following an 8% decline in the 1st quarter. Economists had forecast a 31% slide.
- Large Non-Manufacturers Index slid by 17 to reverse an 8% gain from the 1st quarter. Economists had forecast an 18% decline.
The Japanese Yen moved from ¥107.980 to ¥108.056 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.19% to ¥107.73 against the U.S Dollar.
For the Aussie Dollar
The AIG Manufacturing Index increased from 41.6 to 51.5 in June.
According to the June Survey,
- Parts of the manufacturing sector saw mild expansion for the first time since February.
- While returning to expansion, there was no rebound to buoyant conditions.
- The large food and beverage sectors reported the most significant improvement in June.
- New orders were on the rise as trading restrictions eased.
The Aussie Dollar moved from $0.69063 to $0.69052 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.07% at $0.6908.
For the Kiwi Dollar
Building consents jumped by 35.6% in May, reversing a 6.5% decline from April.
The Kiwi Dollar moved from $0.64152 to $0.64167 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.12% at $0.6462.
Out of China
The Caixin Manufacturing PMI rose from 50.7 to 51.2 in June. Economists had forecast a decline to 50.5.
According to the June Survey,
- Production increased for a 4th consecutive month in June, as the recovery continued.
- While production increased, the rate of output growth eased in June.
- Firms reported a rise in new order volumes as client demand firmed.
- While total new orders expanded for the 1st time since January, new export orders continued to decline.
- Employment remained on a downward trend, with staffing levels in decline for a 6th consecutive month.
- Optimism amongst manufacturers improved to its strongest since February.
The Aussie Dollar moved from $0.69085 to $0.69093 upon release of the figures.
The Day Ahead:
For the EUR
It’s a busy day ahead on the economic calendar. June Manufacturing PMIs are due out of Italy and Spain, with Germany’s May retail sales and unemployment figures for June also in focus.
Finalized Manufacturing PMIs are also due out of France, Germany, and the Eurozone.
For the EUR, Germany’s figures along with Italy and the Eurozone’s Manufacturing PMIs will be the key drivers.
Outside of the stats, expect market risk sentiment towards COVID-19 and the economic outlook to remain in focus. Any further talk of fresh stimulus would provide the EUR with support.
At the time of writing, the EUR was up by 0.04% to $1.1239.
For the Pound
It’s also a relatively quiet day ahead on the economic calendar. June’s finalized manufacturing PMI is due out later today.
Barring a material deviation from prelim, however, the stats should have a limited impact on the Pound.
The focus on the day will be on any updates from Brexit talks, with COVID-19 news also likely to influence.
At the time of writing, the Pound was down by 0.10% to $1.2389.
Across the Pond
It’s a busy day on the U.S economic calendar. Key stats include June’s ADP Employment Change and ISM Manufacturing PMI.
We can expect both sets of numbers to garner plenty of interest ahead of the FOMC meeting minutes due out late in the day.
June’s finalized Markit Manufacturing PMI should have a muted impact on the Dollar and the broader markets.
As always, any chatter from Capitol Hill and updates on COVID-19 will also need monitoring.
At the time of writing, the Dollar Spot Index was down by 0.06% to 97.330.
For the Loonie
It’s a quiet day ahead on the calendar. The Canadian markets are closed in recognition of Canada Day.
That leaves the Loonie in the hands of geopolitics, COVID-19, and the weekly crude oil inventory numbers.
At the time of writing, the Loonie was up by 0.07% to C$1.3567 against the U.S Dollar.
For a look at all of today’s economic events, check out our economic calendar.