It was a quiet week on the economic calendar for the week ending April-08, 2022.
A total of 33 stats were monitored, following 64 stats in the week prior.
Of the 33 stats, 16 beat forecasts, with 14 economic indicators coming up short of forecast. 3 stats were in line with forecasts.
Looking at the numbers, 20 of the stats reflected an upward trend from previous figures. Of the remaining 13 stats, 12 stats were weaker.
Hawkish FOMC member chatter drove Dollar demand ahead of more hawkish than expected FOMC meeting minutes.
Out of the U.S
In the first half of the week, the market focus was on factory orders and service sector PMIs.
The stats were mixed. Factory orders fell by 0.5% in February, partially reversing a 1.5% rise from January, while service sector activity improved.
In March, the market’s preferred ISM Non-Manufacturing PMI increased from 56.5 to 58.3.
On Thursday, jobless claims were also impressive. In the week ending April-01, initial jobless claims fell from 171k to 166k.
With the stats dollar positive, the FOMC meeting minutes were also greenback positive mid-week. More hawkish than anticipated minutes drove demand for the greenback. The minutes revealed plans to begin cutting the FED balance sheet by $95bn per month amidst a rising interest rate environment to curb inflation.
In the week ending April 8, 2022, the Dollar Spot Index rose by 1.18% to end the week at 99.796. In the week prior, the Index fell by 0.16% to 98.632.
Out of the UK
Private sector PMIs were Pound positive.
In March, the services PMI increased from 60.5 to 62.6, up from a prelim 61.0. As a result, the composite PMI rose from 59.9 to 60.9, up from a prelim 59.7.
The construction PMI held steady at 59.1 in March. Economists had forecast a fall to 57.8.
In the week, the Pound fell by 0.68% to end the week at $1.3025. In the week prior, the Pound fell by 0.52% to $1.3114.
The FTSE100 ended the week up 1.73%, following a 1.06% gain from the previous week.
Out of the Eurozone
It was a busy week, with the markets focused on service sector activity and the German economy.
Stats from Germany delivered mixed results. In February, Germany’s trade surplus widened from €8.9bn to €11.5bn, with industrial production up 0.2%. Factory orders slid by 2.2%, however, to test EUR support.
Service sector PMIs were more upbeat. France and Germany saw service sector activity pickup, while Italy and Spain saw activity moderate. Despite this, the Eurozone’s services PMI rose from 55.5 to 55.6. As a result of disappointing manufacturing numbers, the Eurozone’s composite PMI fell from 55.5 to 54.9.
On Thursday, the ECB monetary policy meeting minutes also drew interest.
In line with expectations, policymakers discussed cutting back on stimulus to curb inflation. Policymakers noted that “three forward guidance conditions for an upward adjustment of the key ECB interest rate had either already been met or were very close to being met.”
Despite the need to curb inflation, the war in Ukraine left policymakers on a more cautious footing.
For the week, the EUR slid by 1.50% to $1.0877. In the previous week, the EUR rose by 0.55% to $1.1043.
The EuroStoxx600 rose by 0.57%, while the CAC40 and the DAX ended the week with losses of 2.04% and 1.13%, respectively.
For the Loonie
Trade, Ivey PMI, and employment figures were the key stats of the week.
It was a mixed bag for the Loonie, with Canada’s trade surplus widening from C$2.62bn to $2.66bn. Ivey PMI numbers also impressed, rising from 60.6 to 74.2.
Employment figures for March were disappointing. Employment rose by 72.5k following a 336.6k jump in the previous month. While the increase was modest, the unemployment rate fell from 5.5% to 5.3%.
From the Bank of Canada, the BoC Business Outlook Survey reflected concern amongst businesses about inflation. Around 35% of firms expected inflation to overshoot the BoC’s 2% target for 2-3 years, up from 31% of businesses in the fourth quarter.
In the week ending April-08, the Loonie fell by 0.40 to C$1.2572 against the Greenback. In the week prior, the Loonie declined by 0.36% to C$1.2522.
The Aussie Dollar slipped by 0.51% to $0.7458, with the Kiwi Dollar sliding 1.13% to end the week at $0.6849.
For the Aussie Dollar
Economic data was limited to trade data, which was disappointing. In February, Australia’s trade surplus narrowed from A$12.891bn to A$7.457bn.
With stats on the lighter side, the RBA monetary policy decision and forward guidance failed to provide support.
The lack of support came despite the RBA taking a more hawkish stance on cash rates. Rising house prices may force the RBA to lift interest rates more slowly than the FED.
For the Kiwi Dollar
There were no material stats for the markets to consider, leaving the Kiwi Dollar on the defensive. Monetary policy divergence and weak private sector PMI numbers from China weighed.
For the Japanese Yen
Household spending figures provided little support to the Yen, with spending sliding by a further 2.8% in February. In January, spending fell by 1.2%.
The Japanese Yen slumped by 1.49% to end the week at ¥124.34 against the Dollar. In the week prior, the Yen ended the week down by 0.39% to ¥122.52.
Out of China
It was a quiet week on the economic data front, with stats limited to service sector PMI numbers.
Following disappointing manufacturing data, service sector data also painted a grim picture as China grapples with the latest COVID-19 breakout.
In March, the services PMI fell from 50.2 to 42.0.
In the week ending April-08, the Chinese Yuan fell by 0.03% to CNY6.3650. Through the week prior, the Yuan ended the week rose by 0.05% to CNY6.3629.
The Hang Seng Index ended the week down 0.76%, with the CSI300 falling by 1.06%.