China says IMF race open as Lagarde visits

After a Busy Morning, Focus Shifts to the ECB and UK and U.S Economic Data…

Earlier in the Day:

It was a particularly busy start to the day on the economic calendar. The Aussie Dollar and the Kiwi Dollar were in action ahead of a data deluge from China.

Away from the economic calendar, riskier assets got a boost on more news of progress towards a COVID-19 vaccine. The upside was short-lived, however, as economic data from China delivered mixed results.

Looking at the latest coronavirus numbers

On Wednesday, the number of new coronavirus cases rose by 215,144 to 13,669,634 based on figures at the time of writing. On Tuesday, the number of new cases had risen by 218,739. The daily increase was lower than Tuesday’s rise and 222,368 new cases from the previous Wednesday.

Germany, Italy, and Spain reported 1,523 new cases on Wednesday, which was up from 1,110 new cases on Tuesday. On the previous Wednesday, 986 new cases had been reported.

From the U.S, the total number of cases rose by 66,528 to 3,611,605 on Wednesday. On Tuesday, the total number of cases had increased by 65,594. On Wednesday, 8th July, a total of 62,416 new cases had been reported.

For the Kiwi Dollar

2nd quarter inflation figures were in focus early in the day. According to NZ Stats, consumer prices fell by 0.5% in the 2nd quarter, which was in line with forecasts. In the 1st quarter, consumer prices had risen by 0.8%. The annual rate of inflation eased from 2.5% to 1.5% in the 2nd quarter. This was also in line with forecasts.

The Kiwi Dollar moved from $0.65707 to $0.65747 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.15% to $0.6561.

For the Aussie Dollar

Total employment jumped by 210.8k in June, reversing a 227.7k slide in May. Economists had forecast a 112.5k increase. Full employment fell by 38.1k, however, following on from an 89.1k slide in May. In June, the unemployment rate rose from 7.1% to 7.4%, which was in line with forecasts. The unemployment rate had increased from 6.2% to 7.1% in May.

According to the ABS,

  • Compared to June 2019, full-time employment decreased by 306.8k, with part-time employment falling by 215.5k.
  • The employment to population ratio increased by 1.0 point to 59.2%. In May, the ratio had fallen by 1.1 pts to 58.4%.

The Aussie Dollar moved from $0.70008 to $0.69968 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.23% to $0.6992.

Out of China

The economy grew by 11.5% in the 2nd quarter, reversing a 9.8% contraction with interest in the 1st quarter. Economists had forecast a 9.6% growth. Year-on-year, the economy grew by 3.2%, following a 6.8% contraction in the 1st quarter. Economists had forecast growth of 2.5%.

Industrial production rose by 4.8%, year-on-year, in June, following a 4.4% rise in May. Economists had forecast a 4.7% rise.

Fixed asset investment fell by 3.1% in June, following a 6.3% slide in May. Economists had forecast a 3.3% decline. Also negative was an unexpected fall in retail sales in June. Year-on-year, retail sales fell by 1.8% following a 2.8% decline in May. Economists had forecast a 0.3% rise.

The unemployment rate eased from 5.90% to 5.70% in June.

The Aussie Dollar moved from $0.69951 to $0.69899 upon release of the figures.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.03% to ¥106.97 against the U.S Dollar

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Key stats include finalized June inflation figures from France and May trade figures for the Eurozone.

The main event, however, is the ECB monetary policy decision and all-important press conference later in the day.

Expect plenty of interest in the press conference. Last week we had heard of discord within the ranks…

At the time of writing, the EUR was down by 0.05% to $1.1406.

For the Pound

It’s a relatively busy day ahead on the economic calendar. Key stats include May unemployment and wage growth figures and June’s claimant count numbers.

Expect the unemployment rate and claimant count figures to have the greatest impact on the Pound.

As always, Brexit chatter and market risk sentiment will also influence in the week.

At the time of writing, the Pound was down by 0.22% to $1.2559.

Across the Pond

It’s a relatively busy day ahead for the U.S Dollar. Key stats include Philly FED manufacturing numbers for July, June retail sales figures, and the weekly jobless claims.

We would expect the numbers to garner plenty of interest.

Away from the economic calendar, updates on COVID-19 and chatter from Washington will continue to influence.

At the time of writing, the Dollar Spot Index was up by 0.03% to 96.106.

For the Loonie

It’s a quiet day ahead on the economic calendar. Foreign security purchase figures are due out later today that will likely have a muted impact on the Loonie.

This morning’s stats from China and sentiment towards the economic outlook and demand for crude will remain key drivers. There was some early support following the inventory numbers from Wednesday.

At the time of writing, the Loonie was up by 0.02% to C$1.3506 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.