It was a busier week on the economic calendar, in the week ending 20th August.
A total of 52 stats were monitored, which was up from 40 stats in the week prior.
Of the 52 stats, 24 came in ahead forecasts, with 23 economic indicators coming up short of forecasts. There were 5 stats that were in line with forecasts in the week.
Looking at the numbers, 26 of the stats reflected an upward trend from previous figures. Of the remaining 26 stats, 25 reflected a deterioration from previous.
For the Greenback, market sentiment towards FED monetary policy and economic data delivered Dollar strength. In the week ending 20th August, the Dollar Spot Index rose by 1.06% to 93.496. In the previous week, the Dollar had fallen by 0.30% to 92.523.
Out of the U.S
Key stats included retail sales and jobless claims figures.
Retail sales figures disappointed. In July, retail sales fell by 1.1%, reversing a 0.7% rise from June. Economists had forecast a 0.3% decline. Core retail sales fell by 0.4% versus a forecasted 0.1% rise. In June, core retail sales rose by 1.6%.
On the positive side, however, were labor market numbers once more. In the week ending 13th August, initial jobless claims fell from 377k to 348k. Economists had forecast a decline to 363k.
On the monetary policy front, the FOMC meeting minutes from Wednesday contributed to the upside in the Dollar. FOMC member chatter also suggested a near-term move that drove demand for the Greenback.
Out of the UK
Economic data was on the busier side once more. Employment, inflation, and retail sales figures were in focus.
It was a mixed bag on the economic data front. Claimant counts saw a modest decrease in July, falling by just 7.8k. In June, claimant counts had tumbled by 114.8k.
On the positive, however, was a sharp pickup in wage growth in June and a fall in the unemployment rate. The unemployment rate fell from 4.8% to 4.7%, with average wages incl. bonuses up 8.8%. In May, average wages incl. bonuses had been up by 7.4%.
At the end of the week, retail sales declined by 2.5% in July versus a forecasted 0.4% rise. In June, retail sales had risen by 0.5%. Core retail sales fell by 2.4% versus a forecasted 0.3% rise. Core retail sales had risen by 0.3% in June.
In the week, the Pound slid by 1.75% to end the week at $1.3623. In the week prior, the Pound had fallen by 0.04% to $1.3866.
The FTSE100 ended the week down by 1.81%, reversing a 1.34% gain from the previous week.
Out of the Eurozone
It was a quiet week on the economic data front.
Eurozone employment, 2nd estimate GDP, and finalized inflation figures were in focus.
In line with 1st estimates, the Eurozone economy expanded by 2.0% in the 2nd quarter, rebounding from a 0.3% contraction in the previous quarter. While, the year-on-year, number was revised down from 13.7% to 13.6%, the numbers were good enough to support the EUR.
Employment also picked up in the 2nd quarter, rising by 0.5% to reverse a 0.2% decline from the previous quarter.
On the inflation front, the Eurozone’s annual rate of inflation picked up from 1.9% to 2.2%, which was in line with prelim figures. The Eurozone’s core annual rate of inflation softened from 0.9% to 0.7%, which was also in line with prelim numbers.
For the week, the EUR fell by 0.84% to $1.1698. In the week prior, the EUR had risen by 0.30% to $1.1797.
The CAC40 slid by 3.91%, with the DAX30 and the EuroStoxx600 ending the week with losses of 1.06% and 1.48% respectively.
For the Loonie
It was a busy week on the economic data front.
Inflation, employment, and retail sales figures were in focus through the week.
In July, the core annual rate of inflation accelerated from 2.7% to 3.3%. For the month of July, core consumer prices increased by 0.6% following a 0.3% rise in June.
Employment figures were also Loonie positive. In July, the ADP reported a 221.3k increase in hiring, reversing most of a 294.2k slide from June.
At the end of the week, retail sales delivered much-needed support. In June, retail sales rose by 4.7% versus a forecasted 4.6% increase. Retail sales had fallen by 2.0% in May. Core retail sales rose by 4.2%, reversing a 2.1% decline from May. Economists had forecast a 4.4% rise.
Other stats included housing sector data that had a muted impact on the Loonie.
While the stats were skewed to the positive, bearish market sentiment and sliding crude oil prices weighed.
In the week ending 20th August, the Loonie slid by 2.45% to C$1.2821. In the week prior, the Loonie had risen by 0.31% to C$1.2515.
The Aussie Dollar tumbled by 3.23% to $0.0.7132, with the Kiwi Dollar ending the week down by 2.94% to $0.0.6835.
For the Aussie Dollar
Employment figures were in focus late in the week.
In July, the unemployment rate fell from 4.9% to 4.6% versus a forecasted increase to 5.0%.
While positive, the decline came as a result of a fall in the participation rate attributed to lockdown measures.
Employment rose by a modest 2.2k in July, while full-time employment fell by 4.2k. In June, full-time employment had risen by 51.6k.
On the monetary policy front, the RBA meeting minutes were also in focus early in the week. There were no major surprises, however, with near-term economic speed bumps leaving the RBA in a holding pattern.
For the Kiwi Dollar
It was a particularly quiet week, with no major stats to consider.
The RBNZ monetary policy decision sank the Kiwi Dollar mid-week, however. Expectations of a hawkish rate hike were dashed as New Zealand went into full lockdown earlier in the week.
As a result of the lockdown, the RBNZ hit pause on lifting the cash rate. In spite of a hawkish press conference and upbeat sentiment towards the economy, the Kiwi failed to recover.
For the Japanese Yen
It was a busy week.
At the start of the week, 2nd quarter GDP numbers were in focus. The Japanese economy expanded by 0.3%, quarter-on-quarter, partially surprises recovering from a 1% contraction in the previous quarter. Economists had forecast a 0.2% expansion.
Year-on-year, the economy grew by 1.3% versus a forecasted 0.70%. In the 1st quarter, the economy had contracted by 3.9%.
Mid-week, trade data also beat forecasts, with the trade surplus widening from ¥384.0bn to ¥441.9bn. Exports were up 37.0%, year-on-year. In June, exports had been up 48.6%.
Machinery orders did disappoint, however, with orders falling by 1.5% in June. In May, orders had jumped by 7.8%.
The Japanese Yen fell by 0.17% to ¥109.78 against the U.S Dollar. In the week prior, the Yen had risen by 0.60% to ¥109.59.
Out of China
Industrial production, retail sales, and fixed asset investment numbers were in focus.
Disappointing economic data set the tone for the markets at the start of the week, raising concerns over the economic recovery.
In July, industrial production was up 6.4% year-on-year, which was down from 8.3% in June. Economists had forecast a 7.8% increase.
Retail sales were up 8.5%, which was softer than a 12.1% increase in June. Fixed asset investments increased by 10.3%, year-to-date, compared with 12.6% in June.
On the monetary policy front, the PBoC left loan prime rates unchanged at the end of the week. Despite some weak numbers out of China of late, this was in line with expectations.
In the week ending 20th August, the Chinese Yuan fell by 0.37% to CNY6.5015. In the week prior, the Yuan had ended the week up by 0.03% to CNY6.4774.
The CSI300 and the Hang Seng ended the week down by 3.57% and by 5.84% respectively.