Earlier in the Day:
It was a relatively busy start to the day on the Asian economic calendar this morning. The Japanese Yen and Aussie Dollar by proxy were in action in the early part of the day, with inflation and industrial profit numbers in focus.
Outside of the numbers, the markets responded to the continued rally across the European and U.S equity markets, before turning attention to the latest coronavirus numbers.
On Thursday, the U.S surpassed China with the total number of cases surging to 85,377. In spite of an extended lockdown, Italy wasn’t far behind, with 80,589 cases.
The numbers should be somewhat alarming, particularly considering how quickly the virus is spreading across the U.S.
For the Japanese Yen
The Ku-area of Tokyo saw the annual core rate of inflation eased from 0.5% to 0.4% in March, which was in line with forecasts.
According to the Ministry of Internal Affairs and Communication.
- Prices for education (-6.1%) and fuel, light, and water charges (-2.9%) pinned back inflation in March.
- There were increases in prices for clothes & footwear (+1.9%), culture and recreation (+1.7%), furniture and household utensils (+1.7%), and medical care (+1.2%).
- Price rises for transportation & communication (+0.6%) and housing (+0.5%) were modest, however.
- Month-on-month, consumer prices rose by 0.1%, while core consumer prices stalled.
The Japanese Yen moved from ¥109.331 to ¥109.241 upon release of the figures. At the time of writing, the Japanese Yen was up by 1.17% to ¥108.41 against the U.S Dollar.
Out of China
Year-to-date, industrial profit slumped by 38.3%, following a 3.3% slide in January. With February numbers expected to be dire, there will be the hope of improved numbers in March. While China has only just started coming out of lockdown in some provinces, any improving trend from February may be good enough for the markets in the coming weeks.
The Aussie Dollar moved from $0.60797 to $0.60846 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.28% to $0.6080.
The Kiwi Dollar was up by 0.18% to $0.5973, supported by weakness in the Greenback.
The Day Ahead:
For the EUR
It’s a quiet day on the economic calendar, with no material stats due out of the Eurozone to provide the EUR with direction.
The lack of stats and market risk aversion will likely see further demand for the EUR as the markets also respond to the surge in coronavirus cases in the U.S.
A U.S economic meltdown could well be on the cards should the U.S government fail to get control and that may also mean martial law…
Things are not much better across the EU, however, with the death toll in Spain surpassing China and Italy’s death toll exceeding 8,000.
At the time of writing, the EUR was up by 0.09% at $1.1042.
For the Pound
It’s a quiet day ahead on the economic calendar, with no material stats due out of the UK to provide the Pound with direction.
A lack of stats will leave the Pound susceptible to a tumble should the number of coronavirus cases accelerate ahead of the weekend.
Much will depend on how the UK is doing compared with its neighbors, however. A marked increase elsewhere would ease any downward pressure on the Pound.
Expect any chatter from the UK government on further fiscal policy support to also influence.
At the time of writing, the Pound was down by 0.07% to $1.2195.
Across the Pond
It’s a busy day ahead on the U.S economic calendar. Key stats include the FED’s preferred February inflation figures and personal spending numbers.
Barring particularly dire numbers, however, the market focus will likely be on finalized consumer sentiment figures. While the finalized numbers tend to have a muted impact, March and April stats are of material significance. Downward revisions would add support to the negative sentiment towards the economic outlook.
Expect any chatter from the U.S administration and FED to also influence on the day.
The Dollar Spot Index was down by 0.08% to 99.276 at the time of writing.
For the Loonie
It’s yet another particularly day ahead on the economic calendar, with no material stats due out later today to provide direction.
Risk sentiment will continue to be the key driver on the day. Industrial profit numbers out of China will set the tone early in the day.
The Loonie was down by 0.17% at C$1.4044 against the U.S Dollar, at the time of writing.