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The Weekly Wrap – A Particularly Busy Economic Calendar Left the Greenback in the Red

The Stats

It was a particularly busy week on the economic calendar, in the week ending 3rd September.

A total of 80 stats were monitored, which was up from 49 stats in the week prior.

Of the 81 stats, 34 came in ahead forecasts, with 41 economic indicators coming up short of forecasts. There were 5 stats that were in line with forecasts in the week.

Looking at the numbers, 34 of the stats reflected an upward trend from previous figures. Of the remaining 46 stats, 41 reflected a deterioration from previous.

For the Greenback, FED monetary policy and economic data delivered Dollar weakness. In the week ending 3rd September, the Dollar Spot Index fell by 0.70% to 92.035. In the previous week, the Dollar had fallen by 0.88% to 92.653.

Out of the U.S

Early in the week, consumer confidence figures delivered yet more bad news. In August, the CB Consumer Confidence Index fell from 129.1 to 113.8, as the Delta variant continued to spread.

ADP nonfarm employment change figures on Wednesday also failed to impress. Nonfarm payrolls increased by 374k in August following a modest 326k rise in July.

On Thursday, jobless claim figures were somewhat better, with claims falling from 354k to 340k in the week ending 27th September.

At the end of the week, however, it was official nonfarm payroll figures that were key.

Falling well short of a forecasted 665k increase, payrolls rose by just 243k in August. In July, payrolls had jumped by 1,053k.

In spite of the weak number, the unemployment rate fell from 5.4% to 5.2% to further muddy the waters on FED policy.

From the private sector, the numbers were mixed. The ISM Manufacturing PMI rose from 59.5 to 59.9, while the all-important Non-Manufacturing PMI fell from 64.1 to 61.7.

Out of the UK

Economic data was on the lighter side once more. Finalized private sector PMIs for August disappointed in the week.

The all-important services PMI fell from 59.6 to 55.0, which was down from a prelim 55.5. Of less significance was a fall in the manufacturing PMI from 60.4 to 60.3, which was up from a prelim 60.1.

In the week, the Pound rose by 0.78% to end the week at $1.3871. In the week prior, the Pound had risen by 1.04% to $1.3764.

The FTSE100 ended the week down by 0.14%, partially reversing a 0.85% loss gain the previous week.

Out of the Eurozone

Private sector PMIs for August, French GDP, German unemployment, and prelim August inflation figures were in focus.

While inflationary pressures picked up once more in August, private sector PMIs delivered mixed results in the week.

According to prelim figures, the Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0% in August. The core annual rate of inflation picked up from 0.7% to 1.6%.

French GDP numbers for the 2nd quarter were also upbeat, with the French economy expanding by 1.1% in Q2.  In the previous quarter, the French economy had stagnated.

While Germany’s unemployment rate fell from 5.6% to 5.5% in July, retail sales slid by 5.1%, reversing a 4.5% increase from June. French consumer spending was also woeful, falling by 2.2%. In June, consumer spending had risen by just 0.3%.

Private sector PMIs were weaker but not weak enough to cause a stir.

The Eurozone’s composite PMI fell from 60.2 to 59.0, which was down from a prelim 59.5. In August, the Eurozone’s services PMI fell from 59.8 to 59.0, with the manufacturing PMI declining from 62.8 to 61.4.

For the week, the EUR rose by 0.83% to $1.1795. In the week prior, the EUR had fallen by 0.84% to $1.1698.

The CAC40 rose by 0.12%, while the DAX30 and the EuroStoxx600 ended the week with losses of 0.45% and 0.09% respectively.

For the Loonie

GDP and trade data were the key stats of the week.

In the 2nd quarter, the Canadian economy contracted by 0.3%, quarter-on-quarter. The economy had expanded by 0.3% in the previous quarter.

On an annualized basis, the economy contracted by 1.1% after having expanded by 5.5% in the quarter prior.

Trade figures were also weak, with the trade surplus narrowing from C$2.56bn to C$0.78bn.

While the stats were disappointing, crude oil prices held relatively steady following the previous week’s rebound, to deliver support.

In the week ending 3rd September, the Loonie rose by 0.76% to C$1.2524. In the week prior, the Loonie had rallied by 1.57% to C$1.2620.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar.

The Aussie Dollar rallied by 2.02% to $0.7460, with the Kiwi Dollar ending the week up by 2.10% to $0.7158.

For the Aussie Dollar

Company gross operating profits were upbeat for the 2nd quarter, surging by 7.1%. In the previous quarter, profits had fallen by 0.3%.

Private sector credit rose by 0.7% off the back of a 0.9% increase in June.

Also positive were GDP numbers for the 2nd quarter. Year-on-year, the economy grew by 9.6% compared with 1.1% in the previous quarter. Quarter-on-quarter, the economy expanded by 0.7% after having expanded by 1.8% in the quarter prior.

Trade data on Thursday were upbeat, with the trade surplus widening from A$10.496bn to A$12.117bn.

Retail sales figures were negative, however. In July, retail sales fell by 2.7%, which was in line with prelim figures. Lockdown measures weighed, with sales having fallen by 1.8% in June.

For the Kiwi Dollar

It was a relatively quiet week, with business confidence in focus.

In August, the ANZ Business Confidence Index slid from -3.8 to -14.2. While negative for the Kiwi, the markets were in forgiving mood, however. Expectations of a rebound in confidence limited the damage.

For the Japanese Yen

It was a relatively busy week, with the numbers skewed to the positive.

Retail sales rose by 2.4% in July, which followed a more modest 0.1% increase in June.

Capital spending was also on the rise. In the 2nd quarter, capital spending rose by 5.3%, year-on-year, partially reversing a 7.8% slide from the previous quarter.

Industrial production fell by a relatively modest 1.5%, however, partially reversing a 6.5% jump from June.

Service sector PMI numbers also disappointed in August, falling from 47.4 to 42.9.

The Japanese Yen rose by 0.12% to ¥109.71 against the U.S Dollar. In the week prior, the Yen had fallen by 0.05% to ¥109.84.

Out of China

Private sector PMIs were key stats in the week and were skewed to the negative.

Both the NBS and the Markit Caixin figures disappointed.

According to the NBS, the manufacturing PMI fell from 50.4 to 50.1, with the non-manufacturing PMI falling from 53.3 to 47.5.

Of greater significance, however, was a fall in the Caixin Manufacturing PMI from 50.3 to 49.2.

According to the Markit Caixin survey, things were not much better for the services sector. The Caixin Services PMI slid from 54.9 to 46.7 in August.

In the week ending 3rd September, the Chinese Yuan rose by 0.25% to CNY6.4560. In the week prior, the Yuan had ended the week up by 0.45% to CNY6.4720.

The CSI300 and the Hang Seng ended the week up by 0.33% and by 1.94% respectively.