Service Sector PMIs, Brexit, and Vaccine News Updates in Focus

Earlier in the Day

It’s was a busy start to the week on the economic calendar this morning. The Kiwi Dollar, the Aussie Dollar, and the Japanese Yen were in action early on, with economic data from China also in focus.

For the Kiwi Dollar

Building consents surged by 8.8% in October to hit a 46-year high, following a 3.6% jump in September.

According to NZ Stats,

  • Compared with October 2019, the number of new homes consented increased by 2.8%.
  • Annual new homes consented reached 37,981, to sit just short of 1974’s all-time high 40,025.
  • Strong growth plans to build townhouses, flats, and units drove consents higher.

The Kiwi Dollar moved from $0.70678 to $0.70663 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.10% to $0.7061.

For the Aussie Dollar

Trade data was in focus this morning.

In October, the trade surplus widened from A$5.630bn to A$7.456bn. Economists had forecasted a widening to A$5.800bn.

According to the ABS,

  • Exports of goods and services rose A$1,819m (5%) to A$35,720m
    • There were increases in the net exports of general merchandise (8%), rural goods (8%), and non-rural goods 8%).
    • The net exports of goods under merchanting rose by 100% but only accounted for A$18m of the total increase in exports.
  • Imports of goods and services saw a modest A$178m (1%) increase to A$28,264m.
    • Non-monetary gold imports fell A$232m (33%).
    • Imports of intermediate and other merchandise goods, capital goods, consumption goods, and general merchandise debits each rose by 2%.

The Aussie Dollar moved from $0.74076 to $0.74036 upon release of the figures that preceded service sector PMI numbers from China. At the time of writing, the Aussie Dollar was down by 0.16% to $0.74026.

For the Japanese Yen

Finalized service sector PMI numbers were in focus this morning. The Markit Services PMI came in at 47.8 for November, which was up from an October 47.7.

According to the finalized November Survey,

  • Incoming new business fell at a faster rate, while output saw a softer decline in November.
  • Firms reduced workforce numbers in the month.
    While optimism softened, the level of optimism towards the next 12-months remained elevated.

The Japanese Yen moved from ¥104.502 to ¥104.479 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.11% to ¥104.53 against the U.S Dollar.

From China

The Caixin Services PMI rose from 56.8 to 57.8 in November. Economists had forecast a decline to 56.5.

According to the November survey,

  • Greater customer demand and sustained recovery of market conditions supported the upside.
  • Total new business rose at the fastest pace since April 2010, with business confidence hitting the highest level in over nine-and-a-half years.
  • Employment rose at the fastest pace in over a decade.
  • There was a sharp increase in operating expenses, however.

The Aussie Dollar moved from $0.74013 to $0.74048 upon release of the figures.

The Day Ahead

For the EUR

It’s a busy day ahead on the economic calendar. Spanish and Italian service sector PMI numbers are due out along with Eurozone retail sales figures for October. Finalized services and composite PMI figures are also due out of France, Germany, and the Eurozone.

Barring any marked revisions to prelim figures, we would expect Italy and the Eurozone’s PMIs to garner the greatest interest.

Away from the economic calendar, Brexit updates will also provide direction.

At the time of writing, the EUR was down by 0.02% to $1.2113.

For the Pound

It’s a relatively quiet day ahead on the economic calendar. Finalized services and composite PMI figures are due out later today.

Barring material revisions to prelim figures the stats are unlikely to have a material impact on the Pound.

Expect Brexit updates to be the key driver on the day.

At the time of writing, the Pound was up by 0.01% to $1.3366.

Across the Pond

It’s a relatively busy day ahead for the U.S Dollar. November’s ISM Non-Manufacturing PMI and weekly jobless claims figures will have the greatest influence on market risk sentiment.

Markit services and composite PMI numbers will likely have a muted impact on the day.

Away from the economic calendar, any chatter from Capitol Hill and COVID-19 news updates will continue to influence.

At the time of writing, the Dollar Spot Index was down by 0.08% to 91.041.

For the Loonie

It’s a particularly quiet day on the economic data front. There are no material stats due out to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of crude oil inventories and market risk sentiment.

At the time of writing, the Loonie was down by 0.02% to C$1.2920 against the U.S Dollar.

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

Economic Data, Capitol Hill, and Brexit Put the EUR, USD, and GBP in Focus

Earlier in the Day:

It’s was a quieter start to the week on the economic calendar this morning. The Aussie Dollar was in action.

For the Aussie Dollar

The Australian economy was in focus this morning. In the 3rd quarter, the economy grew by 3.3%, quarter-on-quarter, following a 7.0% contraction in the 2nd quarter. Economists had forecast of 2.6% growth.

According to the ABS,

  • The economy only saw a partial recovery in the September quarter. As a result, economic activity fell 3.8% through the year to September quarter.
  • Household spending jumped by 7.9% to drive the economy, with the upside coming from an easing of lockdown measures.
  • In spite of record quarterly growth in household spending, the level in September was 6.8% lower than that recorded in the December Quarter 2019.
  • Compensation of employees rose 2.3% as hours worked increased. The household saving to income ratio remained elevated at 18.9%. This was down from a June quarter 22.1%, however.
  • Net trade detracted 1.9 percentage points from GDP, the largest detraction since the 3rd quarter of 1980.
  • A demand-driven surge in imports and a fall in the exports of goods and services weighed.

The Aussie Dollar moved from $0.73797 to $0.73855 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.03% to $0.7373.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.04% to ¥104.37 against the U.S Dollar, with the Kiwi Dollar down by 0.10% to $0.7057.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. German retail sales and Spanish and Eurozone unemployment figures are due out.

Barring dire unemployment figures from the Eurozone, German retail sales figures will have the greatest impact.

Away from the economic calendar, Brexit and COVID-19 news updates remain key drivers, however.

At the time of writing, the EUR was down by 0.03% to $1.2067.

For the Pound

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out, leaving the Pound firmly in the hands of Brexit updates.

At the time of writing, the Pound was down by 0.02% to $1.3417.

Across the Pond

It’s a relatively quiet day ahead for the U.S Dollar. November’s ADP Nonfarm Employment Change figures are due out later today. With market concerns over the U.S labor market recovery lingering, today’s stats will provide riskier assets with direction.

Hopes of an imminent COVID-19 vaccine, however, would limit the effect of any disappointing numbers, however.

Away from the economic calendar, any chatter from Capitol Hill and COVID-19 news updates will continue to influence.

At the time of writing, the Dollar Spot Index was up by 0.09% to 91.231.

For the Loonie

It’s a quiet day on the economic data front. There are no material stats due out to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of crude oil inventories and market risk sentiment.

At the time of writing, the Loonie was down by 0.02% to C$1.2938 against the U.S Dollar.

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

The RBA Holds Monetary Policy Unchanged, Delivering Aussie Dollar Support

In line with market expectations, the RBA left its cash target rate unchanged at 0.10%, following last month’s cut from 0.25%.

Additionally,

  • Left the target rate for the yield on 3-year Australian Government Bonds at 0.10%.
  • The Board also left the interest rate on new drawings under the Term Funding Facility at 0.1%.
  • Retained the zero interest rate on Exchange Settlement balances.
  • Left the government bond purchasing program unchanged.

The Statement

Salient points from the RBA Rate Statement included:

Global Outlook

  • Globally, the news has been mixed recently. While infection rates have been on the rise in Europe and the U.S, positive vaccine news should support an economic recovery.
  • The economic recovery slowed as a result of the rise in new COVID-19 cases, however.
  • Any recovery is also dependent on ongoing support from both fiscal and monetary policy.
  • Hours worked in most countries remain noticeably below pre-pandemic levels and inflation is low and below central bank targets.
  • Financial conditions remain accommodative globally.
  • While bond yields sit near historic lows, vaccine news has given the equity markets a boost.

Australian Economy

  • The economic recovery is underway and recent data have generally been better than expected.
  • While positive, the Board expects the recovery to be uneven and drawn out.
  • In the RBA’s central scenario, the GDP will not reach 2019 levels until the end of 2021. Forecasts are for the economy to grow by 5% in 2021 and by 4% over 2022.
  • Employment growth was strong in October, though the unemployment rate rose to 7%.
  • The RBA expects a further rise, as firms restructure in response to the COVID-19 pandemic.
  • However, the Board forecasts the unemployment to decline next year and to sit at around 6% at the end of 2022.
  • As a result of excess capacity, wage growth is subdued and will likely remain so in the coming years.
  • The RBA forecasts inflation to be 1% in 2021 and 1.5% in 2022.
  • To date, authorized deposit-taking institutions have drawn down A$84bn under the Term Funding Facility.
  • Over the past month, the Bank has bought A$19bn of government bonds under the purchasing program.
  • Additionally, the bank purchased a further A$5bn of Aussie government securities in support of the 3-year yield target.
  • Monetary and fiscal support will be required for some time. As a result, the Board will not increase the cash rate until actual inflation is sustainably within the 2-3% target range.
  • Wage growth will have to rise materially to support a pickup in inflationary pressures. This will require significant gains in employment and a return to a tight labor market.
  • Based on the outlook, the Board is not expecting to increase the cash rate for at least 3-years.
  • In light of the evolving outlook for jobs and inflation, the Board will continue to review the size of the bond purchase program.

In response to the RBA monetary policy decision, the Aussie Dollar rose to a morning high of $0.73685 before easing back.

At the time of writing, the Aussie Dollar was up by 0.31% to $0.70638.

AUDUSD 011220 Daily Chart


 

A Busy Economic Calendar and Brexit Put the EUR, Loonie and the Pound in Focus

Earlier in the Day:

It’s was another busy start to the week on the economic calendar this morning. The Japanese Yen and the Aussie Dollar were in action, with economic data from China also in focus.

Later this morning, the RBA will also be in action, delivering its final scheduled monetary policy decision of the year.

For the Japanese

Employment and capital spending figures were in focus early on.

In the 3rd quarter, capital spending slid by 10.6%, following an 11.3% slide from the 2nd quarter. Economists had forecast a 12% tumble.

The jobs/applications ratio increased from 1.03 to 1.04. Economists had forecast a ratio of 1.03.

The Japanese Yen moved from ¥104.344 to ¥104.347 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.03% to ¥104.34 against the U.S Dollar.

For the Aussie Dollar

In the early hours, the AIG Manufacturing Index drew attention. In November, the index fell from 56.3 to 52.10.

According to the November report,

  • An easing of activity restrictions in Victoria supported a return to expansion for the sector in October.
  • In November, there was a slowdown in growth, however, due to lost production as a result of a 3-day shut down in South Australia.
  • The agriculture sector drove demand for F&B and machinery & equipment manufacturers, however.
  • Victoria reported its first month of expansion since March.

The Aussie Dollar moved from $0.73428 to $0.73419 upon release of the figures that preceded the RBA monetary policy decision.

Also in focus ahead of the RBA were October building approvals and 3rd quarter current account figures.

In October, building approvals rose by 3.8%, following a 15.4% jump in September. Economists had forecast a 3% decline.

According to the ABS,

  • Private sector dwellings excluding houses rose by 6.2%, while private sector houses rose by 3.1%.

The current account surplus narrowed from A$17.7bn to A$10.0bn in the 3rd quarter, coming in ahead of a forecasted A$7.1bn surplus.

The Aussie Dollar moved from $0.73585 to $0.73578 upon release of the figures that preceded private sector PMIs from China and the RBA.

Out of China

The Caixin Manufacturing PMI rose from 53.6 to 54.9 in November. Economists had forecast a decline to 53.5.

According to the November survey,

  • Operating conditions saw the strongest improvement for a decade.
  • Growth of both output and new orders jumped to 10-year highs.
  • Domestic demand continued to drive new orders, with overseas new orders rising at a less marked pace.
  • Employment increased at the fastest pace since May 2011 as a result.
  • Increased demand led to stronger inflationary pressures, though both input costs and output charges saw marked increases.
  • Purchase activity was also on the rise, with the increase in purchase activity the sharpest since 2011.

The Aussie Dollar moved from $0.73546 to $0.73590 upon release of the figures that preceded the RBA. At the time of writing, the Aussie Dollar was up by 0.19% to $0.7358.

Elsewhere

At the time of writing, the Kiwi Dollar was up by 0.09% to $0.7023.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Manufacturing PMIs from Italy and Spain are due out along with unemployment figures from Germany. Finalized manufacturing PMIs from France, Germany, and the Eurozone are also due out.

Barring material revisions to prelim figures, Italy and the Eurozone’s PMIs and German unemployment figures will have the greatest influence.

Away from the economic calendar, Brexit and COVID-19 news updates will also remain in focus.

At the time of writing, the EUR was up by 0.18% to $1.1949.

For the Pound

It’s a quiet day ahead on the economic calendar. November’s finalized manufacturing PMI is due out that should have a muted impact on the Pound.

Updates from Brexit negotiations will remain the key driver on the day. While the news is mixed, hopes of a deal continue to prop up the Pound.

At the time of writing, the Pound was up by 0.19% to $1.3348.

Across the Pond

It’s a relatively quiet day ahead for the U.S Dollar. The ISM Manufacturing and finalized Markit Manufacturing PMI figures are due out later today.

Expect the ISM Manufacturing PMI to have a greater influence from the two.

Away from the economic calendar, any chatter from Capitol Hill and COVID-19 news updates will continue to influence.

At the time of writing, the Dollar Spot Index was up by 0.03% to 91.901.

For the Loonie

It’s a busy day on the economic data front. Key stats include 3rd quarter and September GDP numbers.

Following a lack of economic data last week, expect plenty of interest in today’s numbers. Hopes of a COVID-19 vaccine before the end of the year should soften the effects of any disappointing numbers, however.

At the time of writing, the Loonie was up by 0.18% to C$1.2977 against the U.S Dollar.

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

Private Sector PMIs from China Impress, as Focus Shifts to Brexit and the Pound

Earlier in the Day:

It’s was a busy start to the week on the economic calendar this morning. The Japanese Yen, the Kiwi Dollar, and the Aussie Dollar were in action, with economic data from China also in focus.

For the Japanese

Industrial production and retail sales were in focus in the early hours.

Industrial production rose by 3.8% in October, according to prelim figures from the Ministry of Economy, Trade, and Industry. In September production had jumped by 3.9%.

According to the Ministry of Economy, Trade, and Industry, retail sales jumped by 6.4% in October, year-on-year. In September, retail sales had tumbled by 8.7%. Economists had forecast a 7.7% slide.

The Japanese Yen moved from ¥104.104 to ¥104.064 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.21% to ¥103.87 against the U.S Dollar.

For the Kiwi Dollar

Business confidence was in the spotlight. In November, the ANZ Business Confidence rose from -15.7 to -6.9. In October the index had risen from -28.5 to -15.7.

The Kiwi Dollar moved from $0.70348 to $0.70379 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.21% to $0.7042.

Out of Australia

Company gross operating profits for the 3rd quarter increased by 3.2%, following a 15% surge in the 2nd quarter. Economists had forecast a 4.5% rise.

Private sector credit stalled in October, following a 0.1% increase in September.

The Aussie Dollar moved from $0.73983 to $0.73950 upon release of the figures that preceded private sector PMIs from China.

Out of China

Private sector PMIs were in focus this morning. In November, the NBS Manufacturing PMI rose from 51.4 to 52.1, coming in ahead of a forecasted increase to 51.5. The Non-Manufacturing PMI increased from 56.2 to 56.4, supporting a rise in the composite PMI from 55.3 to 55.7.

The Aussie Dollar moved from $0.74023 to $0.74073 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.15% to $0.7398.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Prelim November inflation figures for Spain, Italy, and Germany are due out later today.

Barring particularly dire numbers, however, the stats should have a muted impact on the EUR. Deflationary pressures are expected to build as a result of the COVID-19 2nd wave. With the ECB preparing to deliver further easing next month, today’s stats are unlikely to shift the ECB’s position.

Away from the economic calendar, Brexit and COVID-19 news will continue to influence.

At the time of writing, the EUR was up by 0.08% to $1.1972.

For the Pound

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out, leaving the Pound in the hands of Brexit and market risk sentiment.

Brexit negotiations resumed on the weekend. Expect plenty of influence from updates and chatter throughout the day.

At the time of writing, the Pound was up by 0.17% to $1.3333.

Across the Pond

It’s a relatively quiet day ahead for the U.S Dollar. Chicago’s PMI for November and pending home sales figures for October are due out later today.

Following the better than expected prelim November private sector PMIs last week, the numbers would need to be dire to support the Dollar.

Away from the economic calendar, chatter from Capitol Hill will need monitoring. Stimulus talk and COVID-19 containment plans will be key drivers.

At the time of writing, the Dollar Spot Index was down by 0.11% to 91.693.

For the Loonie

It’s a quiet day on the economic data front. There are no material stats to provide the Loonie with direction.

A lack of stats will leave the Loonie in the hands of COVID-19 news updates and any U.S stimulus chatter from Capitol Hill.

At the time of writing, the Loonie was up by 0.02% to C$1.2986 against the U.S Dollar.

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

Economic Data and Brexit Keep the EUR and the Pound in the Spotlight

Earlier in the Day:

It’s was a relatively quiet start to the day on the economic calendar this morning. The Japanese Yen was in action in the early part of the day.

For the Japanese

November inflation figures were in focus early in the day.

In November, Tokyo’s core annual rate of inflation fell by 0.7%, as deflationary pressures persisted. In October core consumer prices had fallen by 0.5%.

According to the Ministry of Internal Affairs and Communication,

  • Prices for fuel, light, and water charges tumbled by 6.3%, with prices for culture & recreation falling by 4.1%.
  • Education (-1.8%) and transportation & communication (-0.4%) were also a drag in November.
  • There were price increases, however, for medical care (+0.2%), housing (+0.5%), clothes & footwear (+1.1%), and furniture & household utensils (+2.2%).

The Japanese Yen moved from ¥104.258 to ¥104.247 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.14% to ¥104.11 against the U.S Dollar.

Elsewhere

At the time of writing, the Aussie Dollar was down by 0.11% to $0.7354, with the Kiwi Dollar down by 0.03% to $0.7004.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar, with the French economy in the spotlight.

Key stats include November consumer spending and prelim inflation figures, along with finalized 3rd quarter GDP numbers.

We would expect the consumer spending figures to have the greatest impact on the day.

Late in the session, finalized Eurozone consumer confidence figures will likely have a muted impact on the majors.

Away from the economic calendar, Brexit and COVID-19 news will continue to influence.

At the time of writing, the EUR was flat at $1.1913.

For the Pound

It’s yet another particularly quiet day ahead on the economic calendar. There are no material stats due out, leaving the Pound in the hands of Brexit and market risk sentiment.

Brexit negotiations are to resume in London and we can expect the Pound to show some sensitivity to any chatter from either side.

At the time of writing, the Pound was down by 0.05% to $1.3351.

Across the Pond

It’s a quiet day ahead for the U.S Dollar, with the U.S markets on a half-day. There are no material stats from the U.S to provide the Dollar or the broader markets with direction.

At the time of writing, the Dollar Spot Index was up by 0.02% to 92.013.

For the Loonie

It’s also another quiet day on the economic data front. There are no material stats due out to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of COVID-19 news updates and crude oil prices.

At the time of writing, the Loonie was down by 0.05% to C$1.3024 against the U.S Dollar.

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

Economic Data, the ECB, and Brexit Put the EUR and the Pound in Focus

Earlier in the Day:

It’s was a relatively quiet start to the day on the economic calendar this morning. The Aussie Dollar and the Kiwi Dollar were back in action in the early part of the day.

For the Kiwi Dollar

Trade figures were in focus in the early hours. In October, the annual trade surplus widened from NZ$1,710m to a 28-year high NZ$2,190m in the year ended October 2020. Month-on-month, the trade deficit narrowed from NZ$1,017m to NZ$1,000m.

According to NZ Stats,

  • Annual imports fell NZ$6.5bn (10%) to NZ$58bn in the year ended October 2020.
  • The decline in imports was attributed to restrictions on international and domestic travel to curb the spread of the COVID-19 pandemic.
  • In the same period, exports rose by NZ$734m (1.2%) to NZ$60bn.
  • Monthly imports fell by NZ$759m (13%) to NZ$5.3bn in October 2020 compared with October 2019. A slide in the imports of mechanical machinery and equipment weighed.
  • Exports fell NZ$222m (4.4%) to NZ$4.8bn in October 2020 compared with October 2019.

The Kiwi Dollar moved from $0.70039 to $0.70044 upon release of the data. At the time of writing, the Kiwi Dollar was up by 0.01% to $0.7008.

For the Aussie Dollar

Private new capital expenditure fell by 3.00% in the 3rd quarter, following a 5.9% slide in the 2nd quarter. Economists had forecast a 1.5% decline.

According to the ABS,

  • By total Capex volume, transport, postal, and warehousing fell by 19.1%. Construction (-16.8%) and information media and telecommunications (-15.0%) also saw marked declines.
  • Wholesale trade (+10.6%) saw the largest increase in new capital expenditure.
  • Estimate 4 for 2020-21 is A$104,984m, which is up by 6.3% from Estimate 3 for 2020-21.
  • Buildings and structures fell by 3.7%, with equipment, plant, and machinery expenditure declining by 2.2%.

The Aussie Dollar moved from $0.73656 to $0.73652 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.03% to $0.7363.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.12% to ¥104.33 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. From Germany, GfK Consumer Climate figures for November are due out. While the EUR tends to respond to the numbers, any downside move may be muted by the latest COVID-19 vaccine news.

Consumer confidence is likely to get a boost from hopes of an imminent COVID-19 vaccine that would support an easing of containment measures.

From the ECB, the ECB’s monetary policy meeting minutes are due out later in the day. We can expect some EUR sensitivity as the markets look for clues on what policy moves are likely next month.

Away from the economic calendar, Brexit and COVID-19 news will continue to influence.

At the time of writing, the EUR was up by 0.10% to $1.1929.

For the Pound

It’s another particularly quiet day ahead on the economic calendar. There are no material stats due out, leaving the Pound in the hands of Brexit and market risk sentiment.

Brexit negotiations are set to resume and there has been plenty of chatter of an imminent deal.

At the time of writing, the Pound was up by 0.13% to $1.3397.

Across the Pond

It’s a quiet day ahead for the U.S Dollar, with the U.S markets closed for Thanksgiving.

At the time of writing, the Dollar Spot Index was down by 0.07% to 91.927.

For the Loonie

It’s another quiet day on the economic data front. There are no material stats due out to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of COVID-19 news updates and crude oil prices.

At the time of writing, the Loonie was up by 12% to C$1.2992 against the U.S Dollar.

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

Economic Data Puts the U.S Dollar and the U.S Economy in the Spotlight

Earlier in the Day:

It’s was a relatively quiet start to the day on the economic calendar this morning. The Aussie Dollar and the Kiwi Dollar were in action in the early part of the day.

For the Kiwi Dollar

Ahead of the Asian open, the RBNZ released its Financial Stability Report for November. With the RBNZ prepared to drop rates into negative territory, there was plenty of interest.

Headline comments from the Report included:

  • Fiscal and monetary support have both prevented a substantial rise in unemployment.
  • Significant downside risks remain and some sectors will face continued stress.
  • The financial system has been insulated from significant stress so far.
  • Banks need to keep supporting customers and economic recovery.
  • The RBNZ intends to reinstate LVR restrictions to manage risks from high-risk housing lending.
  • Reserve Bank supports efforts to improve disclosure of climate risks.

The Kiwi Dollar moved from $0.69729 to $0.69743 upon release of the report that preceded Governor Orr’s speech later in the morning. At the time of writing, the Kiwi Dollar was up by 0.07% to $0.6983.

For the Aussie Dollar

Construction work done slid by 2.6% in the 3rd quarter, following on from a 0.7% decline in the 2nd quarter. Economists had forecast a 2% decline.

According to the ABS,

  • Residential construction work done fell by 1.0%, while non-residential construction work down slid by 3.4%.
  • Building construction fell by 1.0%, while engineering slid by 3.3%.

The Aussie Dollar moved from $0.73691 to $0.73640 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.04% to $0.7358.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.11% to ¥104.55 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. From France, job seeker figures are due out later today. Barring particularly dire numbers, the impact on the EUR will likely be muted, however.

November’s private sector PMI numbers and containment measures to curb the spread of COVID-19 will impact labor market conditions. Weak numbers should, therefore, not be a surprise.

From the ECB, the Financial Stability Review will have an influence. How the ECB views financial stability amidst the economic meltdown is of particular relevance to what lies ahead on the policy front.

At the time of writing, the EUR was up by 0.09% to $1.1903.

For the Pound

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out, leaving the Pound in the hands of Brexit and market risk sentiment.

At the time of writing, the Pound was up by 0.02% to $1.3360.

Across the Pond

It’s also a particularly busy day ahead for the U.S Dollar. A data deluge ahead of Thanksgiving puts the Dollar and riskier assets in the spotlight.

Key stats include the weekly jobless claims, core durable goods, 2nd estimate GDP, and personal spending figures.

Other stats due out include inflation, durable goods, consumer sentiment, and new home sales figures. These stats should have a relatively muted impact on the Dollar and the broader financial markets, however.

On the monetary policy front, the FOMC meeting minutes will also influence late in the session.

The markets are expecting the FED to deliver more support amidst the political wrangling on Capitol Hill. Failure by lawmakers to deliver a COVID-19 stimulus package has put the onus back on the FED.

At the time of writing, the Dollar Spot Index was down by 0.11% to 92.122.

For the Loonie

It’s another quiet day on the economic data front. There are no material stats due out to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of U.S economic data and politics, and COVID-19 news updates.

At the time of writing, the Loonie was flat at C$1.2998 against the U.S Dollar.

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

Brexit – Talks are set to resume by Friday as the Pound inches towards $1.34

The Latest

Brexit talks are set to resume later this week after both sides had agreed to suspend talks. A member of Barnier’s team had tested positive, meaning that the EU and the UK missed the EU Summit deadline last Thursday.

This week, there have been numerous reports of an imminent deal that would end the threat of a hard Brexit.

Details are sketchy, however. The talk has been of an interim, changeable agreement that would prevent Britain from leaving without an agreement.

This would ultimately give both sides more time to then fine-tune terms, without either side threatening to walk away.

Irish Prime Minister Martin reportedly affirmed reports of an imminent deal. Martin spoke this week, saying that the outline of a deal could be out by the end of this week.

Neither Boris Johnson nor Ursula Von der Leyen have made similar assessments, however. The lack of wider optimism has pegged the Pound back for now.

Pound

At the time of writing, the Pound was up by 0.35% to $1.33698 against the Dollar. While there hasn’t been a sharp response to the optimism across the news wires, the trend has been upwards.

We could see $1.40 levels come into play should both the EU President and British Prime Minister talk of an imminent deal. Some apprehension before an official announcement of a deal is expected, however.

The Pound has been here before…

With BoE Governor Bailey also talking of Brexit as the key threat to the UK economy, expect a market response to any news later in the week.

One drag on the Pound, however, will be the COVID-19 pandemic and existing containment measures.

This threat is also easing to a certain extent, however, as a number of pharmas make strides towards delivering an effective vaccine.

Taking into account the two greatest threats to the British economy, a Brexit deal and a COVID-19 vaccine would likely deliver quite a boost.

Downside risks remain, however, if Barnier’s more cautious comments are anything to go by.

It may fall on Boris Johnson to wrap things up on the Brexit front. A successful intervention would not only provide the Pound with support but cement Johnson’s position as Prime Minister. After a stretch of political uncertainty, this too should deliver support for the Pound.

GBPUSD 241120 Daily Chart

COVID-19 and Biden News Support Riskier Assets Ahead of U.S and German Stats

Earlier in the Day:

It’s was a quiet start to the day on the economic calendar this morning. There were no material stats through the early part of the day to provide the markets with direction.

The lack of stats left the majors to respond to COVID-19 vaccine news and Trump’s green light for Biden’s transition.

Elsewhere

At the time of writing, the Japanese Yen down by 0.01% to ¥104.53 against the U.S Dollar. The Aussie Dollar was up by 0.32% to $0.7309, with the Kiwi Dollar up by 0.64% to $0.6968.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Finalized 3rd quarter GDP and November IFO Business Climate Index figures from Germany are due out.

With the 2nd wave of the COVID-19 pandemic hitting the Eurozone economy in the 2nd quarter, the GDP numbers will likely have a muted impact on the EUR.

The markets will be expecting a fall in the Business Climate Index in November, which should limit the downside for the EUR.

Late in the day, ECB President Lagarde is due to speak. Any monetary policy chatter will provide the EUR with direction.

At the time of writing, the EUR was up by 0.03% to $1.1844.

For the Pound

It’s a quiet day ahead on the economic calendar. There are no material stats due out, leaving the Pound in the hands of Brexit and market risk sentiment.

At the time of writing, the Pound was up by 0.07% to $1.3330.

Across the Pond

It’s also a relatively busy day ahead for the U.S Dollar. November consumer confidence figures are due out late in the day.

With the U.S reintroducing containment measures to curb the spread of the COVID-19 pandemic, a fall in confidence is likely.

Weaker retail sales figures from last week and a further decline in consumer confidence would weigh on riskier assets.

Hopes of a COVID-19 vaccine, however, should limit the damage.

At the time of writing, the Dollar Spot Index was down by 0.04% to 92.471.

For the Loonie

It’s a quiet day on the economic data front. There are no material stats due out to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of PMI numbers and COVID-19 news updates.

At the time of writing, the Loonie was up by 0.15% to C$1.3062 against the U.S Dollar.

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

Turkey: Central Bank Decision Calms Investor Nerves, But a Sustained Policy Reorientation Needed

The Turkish central bank backed up words with action in last week’s monetary policy decision – raising the key repo rate 475bps to 15% from 10.25%. In addition, the central bank indicated that commercial banks will have access to financing exclusively via the one-week repo auction window, with the repo rate henceforth the “only” indicator of monetary policy.

This ends for now a phase of “backdoor”, unorthodox rate increases via alternative tools that the central bank had employed to avoid any unwanted attention from President Recep Tayyip Erdoğan – who prefers low interest rates – and which had failed to assuage market concerns of too-easy central bank policy.

The central bank’s rate increase, both in its scale and in the consolidation of various policy instruments, was intended to address investors’ immediate concerns, ease pressures on the lira and stem a full-blown currency crisis. This has eased some concerns that central bank policy would remain behind the curve under new governance.

Shift near term to a more market-friendly, conventional monetary policy

The sizeable 30% depreciation in lira this year before ex-Central Bank Governor Murat Uysal’s dismissal appears to have been the final straw that forced this month’s reset of economic governance and the shift, at least near-term, towards a more market-friendly, more conventional monetary policy framework under Governor Naci Ağbal.

With this rate hike, Ağbal demonstrated that he holds enough influence and sway with the Turkish president to convince him to tolerate higher rates near term to fight inflation. Turkey’s real policy rates were negative before Thursday’s policy change with an annual rate of inflation of 11.9% in October. Real policy rates have since flipped to +2.8%

Complacency quickly returned after rate hike initially calmed investors’ nerves in 2018

That said, we have been here before. In 2018, the central bank raised rates by 625bps and similarly consolidated multiple policy instruments to reverse a sharp lira sell-off, only for complacency to speedily re-emerge by the following year as the lira stabilised and inflation receded.

The Turkish government’s underlying bias in favour of looser monetary policy has not dissipated overnight. Nor has Turkey’s executive presidency, in place since 2018 and which overtly subverts central bank independence, changed.

Possibility of greater near-term lira stability, but longer-term governance risks remain

While any sustained return to conventional monetary policies amid this year’s crisis could support greater lira stability in the short run and possibly help begin a process of rebuilding depleted foreign-exchange reserves, longer-term risks remain that significant institutional and governance deficits of the past re-emerge once the immediate crisis is in the rear-view mirror.

An important upcoming task is using this forthcoming window to rebuild Turkey’s official reserves, which stood at USD 82.4bn on 15 November, compared with USD 105.7 at year-end 2019 and USD 134.6bn at a 2013 peak. Official reserves cover around 61% of short-term external debt. Net reserves excluding short-run swaps with domestic banks stood at all-time lows of negative USD 47.5bn in September, cut sharply from (positive) USD 18.5bn at end-2019.

The government needs to tackle external-sector weaknesses

The risk that a longer-standing structural depletion of Turkey’s foreign-currency reserves poses to the economy’s external sector stability remains real and calls upon the near-term shift in policy frameworks to not only be maintained but strengthened. This will require tighter, more sustainable monetary, fiscal and structural economic policies over a longer period both in crisis and outside of crisis – something that has been lacking in the past – which prioritise lower but more sustainable economic growth.

In addition, Turkey needs to strengthen its flexible exchange rate regime – a traditional credit strength – and reduce severe external sector vulnerabilities, such as structural current account deficits, economic vulnerabilities to capital outflows and high FX exposures.

Scope downgraded Turkey’s foreign-currency long-term issuer and senior unsecured debt ratings to B from B+ on 6 November, while affirming Turkey’s long-term issuer and senior unsecured debt ratings in local currency at B+. Scope revised the Outlooks on Turkey’s long-term ratings in both foreign and local currency to Negative from Stable. Scope will next review Turkey’s sovereign ratings and Outlooks in H1-2021.

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

Dennis Shen is a Director in Sovereign and Public Sector ratings at Scope Ratings GmbH.

Private Sector PMIs and Brexit Put the EUR, the Pound, and the Dollar in Focus

Earlier in the Day:

It’s was a relatively quiet start to the day on the economic calendar this morning. The Kiwi Dollar was in action in the early part of the day.

For the Kiwi Dollar

Retail sales jumped by 28% in the 3rd quarter, reversing a 14.6% slide from the 2nd quarter. This was the largest quarterly rise since records began.

According to NZ Stats,

  • Year-on-year, retail sales rose by 7.4%, partially reversing a 15% slump from the 2nd
  • Spending on major household items, vehicles, and groceries supported the 7.4% rise in total sales compared with September 2019.
  • Motor vehicles and parts retailing had the largest rise in sales, up 13%. Supermarket and grocery store sales rose by 8.4%.

The Kiwi Dollar moved from $0.69321 to $0.69249 upon release of the data. At the time of writing, the Kiwi Dollar was up by 0.16% to $0.6940.

Elsewhere

At the time of writing, the Japanese Yen up by 0.02% to ¥103.84 against the U.S Dollar, with, the Aussie Dollar up by 0.07% to $0.7307.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Prelim private sector PMI  numbers for November for France, Germany, and the Eurozone are due out later today.

With parts of the EU back in lockdown mode, expect plenty of sensitivity to the numbers. The ECB has assured of support next month, today’s numbers could give an idea of what kind of support to expect.

At the time of writing, the EUR was up by 0.03% to $1.1861.

For the Pound

It’s a relatively busy day ahead on the economic calendar. Prelim private sector PMI numbers for November are due out.

With lockdown measures in place from the start of the month, today’s figures could force the BoE’s hand in delivering negative rates…

Away from the economic calendar, Brexit will continue to be a key area of focus. From the weekend, news of a post-Brexit trade agreement with Canada should provide some early support.

At the time of writing, the Pound was up by 0.19% to $1.3300.

Across the Pond

It’s also a relatively busy day ahead for the U.S Dollar. November’s prelim private sector PMIs are due out. With labor market conditions in dire straits as a result of containment measures in place, service sector activity will be the main focal point.

Away from the economic calendar, chatter from Capitol Hill and COVID-19 news updates will remain key drivers.

At the time of writing, the Dollar Spot Index was down by 0.03% to 92.360.

For the Loonie

It’s a quiet day on the economic data front. There are no material stats due out to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of PMI numbers from the U.S and the EU and COVID-19 news updates.

At the time of writing, the Loonie was up by 0.05% to C$1.3089 against the U.S Dollar.

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

Economic Data Puts the Loonie, the Pound, and the EUR in Focus

Earlier in the Day:

It’s was a busy start to the day on the economic calendar this morning. The Japanese Yen and the Aussie Dollar were in action in the early part of the day. Later this morning, the PBoC will also be in action, with loan prime rates in focus. No moves are anticipated, however.

Away from the economic calendar, market jitters over the continued rise in COVID-19 cases weighed on riskier assets early on.

For the Japanese Yen

In October, deflationary pressures picked up, with core consumer prices falling by 0.7% year-on-year. In September, core consumer prices had fallen by 0.3%. Economists had forecast a 0.7% decline.

Consumer prices fell by 0.4%, year-on-year, after having stalled in September. Economists had forecast a 0.3% decline.

The Japanese Yen moved from ¥103.836 to ¥103.794 upon release of the figures. At the time of writing, the Japanese Yen down by 0.10% to ¥103.84 against the U.S Dollar

For the Aussie Dollar

Reversing a 1.10% fall in September, retail sales jumped by 1.6% in October, based on prelim figures. Economists had forecast a more modest 0.3% rise.

According to the ABS,

  • Victoria saw sales increased by 5.2%, while still down by 5.7% from October 2019 levels.
  • By industry, cafes, restaurants, and takeaway food services led the way.
  • Support also came from rising clothing, footwear, and personal accessory retailing, other retailing, and department stores.
  • Compared with October 2019, turnover rose by 7.3%.

The Aussie Dollar moved from $0.72781 to $0.72803 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.11% to $0.7280.

Elsewhere

At the time of writing, the Kiwi Dollar was down by 0.03% to $0.6913.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. German wholesale inflation and Eurozone consumer confidence figures are due out later today.

Expect the consumer confidence figures for the Eurozone to have the greatest impact. With the EU struggling to contain the COVID-19 pandemic, a slide in confidence would add further downside risks to the economic outlook.

Away from the economic calendar, Brexit, COVID-19, and chatter from Capitol Hill will also provide direction on the day.

At the time of writing, the EUR was flat at $1.1875.

For the Pound

It’s a busier day ahead on the economic calendar. October retail sales figures are due out later this morning.

Positive numbers may well have a muted impact on the Pound, however. The British government had to reintroduce lockdown measures at the start of November, which paints a gloomy picture for the quarter.

Away from the economic calendar, Brexit will continue to be a key area of focus.

At the time of writing, the Pound was down by 0.05% to $1.3255.

Across the Pond

It’s a quiet day ahead for the U.S Dollar. There are no material stats to provide the Dollar with direction on the day.

The lack of stats will leave COVID-19 news and any stimulus package news in focus.

At the time of writing, the Dollar Spot Index was down by 0.02% to 92.294.

For the Loonie

It’s a relatively busy day on the economic data front. October house price and September retail sales figures are due out.

Expect the retail sales figures to have the greatest impact on the economic data front.

Away from the economic calendar, however, a continued spike in new COVID-19 cases will test support for riskier assets on the day.

At the time of writing, the Loonie was down by 0.04% to C$1.3078 against the U.S Dollar.

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

Economic Data, COVID-19, and the EU Summit Put the USD, EUR, and the GBP in Focus

Earlier in the Day:

It’s was a relatively busy start to the day on the economic calendar this morning. The Aussie Dollar was in action in the early part of the day.

Away from the economic calendar, market jitters over the continued rise in COVID-19 cases weighed on riskier assets early on.

For the Aussie Dollar

October employment change figures were in focus. Following the RBA meeting minutes from Tuesday, a move in the Aussie Dollar was anticipated in response to the release. The move was short-lived, however.

According to the ABS,

  • Employment jumped by 178.8k in October, reversing a 29.5k fall from September with interest. Economists had forecast a 30.0k decline.
  • Total employment rose by 97.0k, reversing a 20.1k fall from September.
  • The unemployment rate rose from 6.9% to 7.0%, which was better than a forecasted increase to 7.2%

The Aussie Dollar moved from $0.72867 to $0.72948 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.21% to $0.7290.

Elsewhere

At the time of writing, the Japanese Yen down by 0.05% to ¥103.87 against the U.S Dollar, while the Kiwi Dollar was down by 0.32% to $0.6905.

The Day Ahead:

For the EUR

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out of the Eurozone to provide the EUR with direction.

The lack of stats will leave the EUR in the hands of COVID-19 news updates and Brexit chatter. Both the Pound and the EUR have stood their ground until now, can that continue?

Today’s EU Summit, not only puts the Pound in the spotlight, however. Disagreements over the EU budget and Recovery Fund has also resurfaced. This is expected to be another hot topic at the Summit.

On the monetary policy front, ECB President Lagarde is due to speak later today. Any chatter on monetary policy will need monitoring. The big question will be whether the ECB will hold back following positive news from both Pfizer Inc. and Moderna Inc. on COVID-19 vaccine trials. Until now, Lagarde as suggested that the ECB will deliver.

At the time of writing, the EUR was down by 0.13% to $1.1838.

For the Pound

It’s also a relatively quiet day ahead on the economic calendar. CBI Industrial Trend Orders for November are due out later today.

With Brexit and COVID-19 in focus, service sector data will likely have a far greater influence near-term. That should therefore limit any influence from the CBI numbers for November.

Away from the economic calendar, it’s the EU Summit. This was supposed to be the final deadline for Brexit talks, so expect plenty of influence from the news wires.

At the time of writing, the Pound was down by 0.30% to $1.3233.

Across the Pond

It’s a busier day ahead for the U.S Dollar. October homes sales, November Philly FED Manufacturing, and the weekly jobless claim are in focus.

Expect the Philly FED and jobless claims to have the greatest influence on the day.

Away from the economic calendar, chatter from Capitol Hill and updates on COVID-19 will remain key drivers.

Any progress towards a stimulus package would support riskier assets, though the chances of any progress remain slim. It’s all about the expectation for now…

At the time of writing, the Dollar Spot Index was up by 0.22% to 92.517.

For the Loonie

It’s a particularly quiet day on the economic data front. There are no material stats due out to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of market risk sentiment on the day. There are still plenty of downside risks that can send the economy into a longer tailspin to overshadow progress towards a COVID-19 vaccine.

At the time of writing, the Loonie was down by 0.12% to C$1.3097 against the U.S Dollar.

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

Brexit and Inflation Figures Put the Pound in the Spotlight

Earlier in the Day:

It’s was a busy start to the day on the economic calendar this morning. The Kiwi Dollar, Japanese Yen, and the Aussie Dollar were in action in the early part of the day.

For the Kiwi Dollar

In the 3rd quarter, the producer price input index rose by 0.6%, partially reversing a 1% decline from the 2nd quarter.

According to NZ Stats,

  • In the 3-months to September, prices received by producers fell by 0.3%, while prices paid bounced back.
  • Prices paid for rent and fuel were on the rise in the 3rd quarter. Petrol and diesel prices increased by 7.0% and by 9.2% respectively.

The Kiwi Dollar moved from $0.68945 to $0.68912 upon release of the figures. At the time of writing, the Kiwi Dollar down by 0.20% to $0.6877.

For the Japanese Yen

The trade surplus widened from ¥687.8bn to ¥872.9bn in October. Economists had forecasted a narrowing to ¥250.0bn.

According to figures released by the  Ministry of Finance,

  • Year-on-year, exports fell by 0.2% to ¥6,566,069m.
    • Exports to China jumped by 10.2%, supporting a 4.4% increase in exports to Asia.
    • The 2nd wave of the COVID-19 pandemic weighed on demand from Europe, however, with exports falling by 7.9%. France (-20.2%) and the UK (-22.8%) weighed on demand.
    • To the U.S, exports rose by a modest 2.5%.
  • Imports slid by 13.3% to ¥5,693,170m.
    • Imports from China fell by 3.7%, with imports from Australia sliding by 26.3%.
    • From the U.S, imports fell by 15.6%, with imports from Europe declining by 10.8%.

The Japanese Yen moved from ¥104.175 to ¥104.122 upon release of the figures. At the time of writing, the Japanese Yen up by 0.05% to ¥104.14 against the U.S Dollar.

For the Aussie Dollar

Wages grew by just 0.1% in the 3rd quarter, following a 0.2% rise in the 2nd quarter. Economists had forecast a 0.2% rise.

The Aussie Dollar moved from $0.72850 to $0.72742 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.36% to $0.7275.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Finalized October inflation figures for the Eurozone are due out later today.

With the ECB set to deliver next month, the stats are unlikely to have a material impact on the EUR, however.

With Brexit negotiations reaching the final day of talks, updates from Brexit will influence. COVID-19 news will also provide direction, however.

At the time of writing, the EUR was down by 0.08% to $1.1853.

For the Pound

It’s also a relatively quiet day ahead on the economic calendar. October inflation figures are due out later this morning.

With the BoE ready to drop rates into negative territory, the annual rate of inflation and wholesale inflation will be the key drivers.

The stats are unlikely to have a material impact on the Pound, however. With the EU Summit tomorrow, it’s all about Brexit. Optimism and hopes of a trade agreement have continued to support the Pound…

At the time of writing, the Pound was flat at $1.3246.

Across the Pond

It’s a relatively busy day ahead for the U.S Dollar. October building permits and housing starts are due out later today.

With mortgage rates at close to record lows, the numbers are unlikely to provide the U.S Dollar with direction.

Expect U.S politics and COVID-19 news updates to be the key drivers on the day.

At the time of writing, the Dollar Spot Index was up by 0.09% to 92.503.

For the Loonie

It’s a relatively busy day on the economic data front. October inflation figures are due out later today. Expect Loonie sensitivity to the numbers.

Market risk sentiment and COVID-19 news updates will also influence throughout the day.

At the time of writing, the Loonie was down by 0.08% to C$1.3115 against the U.S Dollar.

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

Economic Data and Brexit Put the Dollar and the Pound in the Spotlight

Earlier in the Day:

It’s was a quiet start to the day on the economic calendar this morning. There were no material stats to provide the majors with direction early in the session.

The lack of stats left the markets to respond to moves across the European and U.S sessions and the latest COVID-19 vaccine news.

On the monetary policy front, however, the RBA meeting minutes drew some attention this morning.

For the Aussie Dollar

The latest minutes revealed that the Board is prepared to deliver more stimulus to support the economic recovery.

  • The Bank remained prepared to purchase bonds in whatever quantity is required to achieve the 3-year yield target. Any purchases would be in addition to the A$100bn program.
  • Addressing the high rate of unemployment was considered to be an important national priority.
  • Members considered that there was little to be gained from short-term interest rates moving into negative territory, however.
  • It was therefore agreed that a negative policy rate would be extraordinarily unlikely.

The Aussie Dollar moved from $0.73241 to $0.73278 upon release of the minutes. At the time of writing, the Aussie Dollar was down by 0.08% to $0.7314.

Elsewhere

At the time of writing, the Japanese Yen up by 0.06% to ¥104.52 against the U.S Dollar, while the Kiwi Dollar was down by 0.06% to $0.6900.

The Day Ahead:

For the EUR

It’s a particularly quiet day ahead on the economic calendar. There are no material stats to provide the EUR with direction.

A lack of stats will leave updates on Brexit talks and COVID-19 to influence on the day.

On the monetary policy front, ECB President Lagarde is scheduled to speak late in the day. Any details of what to expect next month would provide the EUR with direction.

At the time of writing, the EUR was up by 0.08% to $1.1861.

For the Pound

It’s also a particularly quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction.

A lack of stats will also leave the Pound in the hands of Brexit and COVID-19 news updates.

On the monetary policy front, BoE Governor Bailey is due to speak later today. Any guidance on monetary policy will influence.

At the time of writing, the Pound was up by 0.11% to $1.3214.

Across the Pond

It’s a relatively busy day ahead for the U.S Dollar. October retail sales and industrial production, and September business inventory numbers are due out.

Expect October’s retail sales figures to be the key driver on the day, with consumption key to the economic recovery. Dire labor market conditions and concerns over the economic outlook are likely to pin back spending near term.

Away from the economic calendar, chatter from Capitol Hill, and COVID-19 news updates will continue to influence.

At the time of writing, the Dollar Spot Index was down by 0.17% to 92.486.

For the Loonie

It’s a quiet day on the economic data front. Wholesale sales and foreign securities purchase figures for September are due out. Barring particularly dire numbers, however, the stats are unlikely to have a material impact on the Loonie.

Market risk sentiment and COVID-19 news updates will remain the key drivers on the day.

At the time of writing, the Loonie was up by 0.02% to C$1.3072 against the U.S Dollar.

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

Economic Data from China Sets the Tone, with COVID-19 and Brexit in Focus

Earlier in the Day:

It’s was a busy start to the day on the economic calendar this morning. The Japanese Yen and Aussie Dollar by proxy were in action in the early part of the day. Later today, RBA Governor Lowe is scheduled to speak, which could provide further direction for the Aussie Dollar.

For the Japanese Yen

In the 3rd quarter, the Japanese economy grew by 5.0%, partially reversing an 8.2% contraction from the 2nd quarter. Year-on-year, the economy expanded by 21.4% after having contracted by 28.8% in the 2nd quarter.

Economists had forecasted a quarter-on-quarter rise of 4.4% and an 18.9% rebound, year-on-year.

  • Capital expenditure continued to weigh in the 3rd Quarter-on-quarter, capital expenditure fell by 3.4%, following a 4.5% slide from the 2nd quarter.
  • External demand and private consumption provided support, however.
    • In the quarter, external demand rose by 2.9%, following a 3.3% fall in the 2nd
    • Private consumption increased by 4.7%, reversing a 3.1% slide from the 2nd

The Japanese Yen moved from ¥104.679 to ¥104.686 upon release of the figures. At the time of writing, the Japanese Yen up by 0.10% to ¥104.53 against the U.S Dollar.

Out of China

Key stats included October’s fixed-asset investment, industrial production, unemployment, and retail sales figures.

  • Industrial production rose by 6.9% in October, following a 6.9% increase in September. Economists had forecast a 6.5% rise.
  • Fixed asset investment increased by 1.8%, following a 0.8% increase in September. Economists had forecast a 1.6% increase.
  • Retail sales rose by a further 4.3%, following a 3.3% rise in the month prior. Economists had forecast a 4.9% increase.
  • The unemployment rate fell from 5.4% to 5.3%, which was in line with forecasts.

The Aussie Dollar moved from $0.72927 to $0.72961 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.33% to $0.7294

Elsewhere

At the time of writing, the Kiwi Dollar was up by 0.60% to $0.6886.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Finalized October inflation figures for Italy are due out later today.

With Brexit and the effects of COVID-19 lockdown measures in focus, the numbers are unlikely to move the dial.

On the monetary policy front, ECB President Lagarde could provide direction, however. Following assurances last week of further support next month, any details would garner plenty of interest.

At the time of writing, the EUR was up by 0.13% to $1.1849.

For the Pound

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction.

A lack of stats will leave the Pound in the hands of Brexit and COVID-19 news updates.

On the Brexit front, there has been some chatter on extending trade talks…

At the time of writing, the Pound was up by 0.25% to $1.3222.

Across the Pond

It’s a relatively quiet day ahead for the U.S Dollar. NY Empire State Manufacturing Index figures are due out later today.

With the market focus on COVID-19, containment measures, and the likely impact on consumption, the numbers are unlikely to have a material impact on market risk sentiment.

Away from the economic calendar, chatter from Capitol Hill, and COVID-19 news updates will continue to influence.

At the time of writing, the Dollar Spot Index was down by 0.16% to 92.608.

For the Loonie

It’s a quiet day on the economic data front. Manufacturing sales figures for September are due out. Barring particularly dire numbers, however, the stats are unlikely to have a material impact on the Loonie.

Market risk sentiment and COVID-19 news updates will remain the key drivers on the day.

At the time of writing, the Loonie was up by 0.20% to C$1.3111 against the U.S Dollar.

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

Consumer Sentiment, COVID-19, and Capital Hill Puts the Dollar in Focus

Earlier in the Day:

It’s was a quiet start to the day on the economic calendar this morning. The Kiwi Dollar was in action in the early part of the day.

For the Kiwi Dollar

The Business PMI fell from 54.0 to 51.7 in October. In September, the PMI had risen from 50.7 to 54.0.

The Kiwi Dollar moved from 0.68383 to $0.68375 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.10% to $0.6834.

Elsewhere

At the time of writing, the Aussie Dollar was up by 0.01% to $0.7233, with the Japanese Yen up by 0.17% to ¥104.95 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Trade data and 2nd estimate GDP numbers for the 3rd quarter are due out for the Eurozone. Finalized October inflation figures for Spain and France are also due out

Barring deviation from prelim figures, however, the stats and September trade data are unlikely to have a material impact.

Away from the economic calendar, chatter from Capitol Hill and updates on Brexit and COVID-19 will continue influence.

At the time of writing, the EUR was up by 0.01% to $1.1807.

For the Pound

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction.

A lack of stats will leave the Pound in the hands of Brexit and COVID-19 news updates.

At the time of writing, the Pound was down by 0.01% to $1.3117.

Across the Pond

It’s a relatively quiet day ahead for the U.S Dollar. Prelim consumer sentiment and expectation figures for November are due out late in the day. Ahead of the numbers, October wholesale inflation figures are also due out.

Expect the consumer sentiment figure to have the greatest influence on the day.

Away from the economic calendar, chatter from Capitol Hill will continue to influence.

At the time of writing, the Dollar Spot Index was down by 0.04% to 92.929.

For the Loonie

It’s another quiet day on the economic data front. There are no material stats to provide the Loonie with direction on the day.

A lack of stats will continue to leave the Loonie in the hands of market risk sentiment and COVID-19 news updates.

At the time of writing, the Loonie was down by 0.05% to C$1.3147 against the U.S Dollar.

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

EUR/USD Mid-Session Technical Analysis for November 12, 2020

The Euro edged higher against the U.S. Dollar on Thursday as investors appeared to waver between optimism and caution over expectations about a COVID-19 vaccine that is unlikely to avert a grim winter in Europe and the United States as the pandemic’s second wave intensifies. Both areas are grappling with surging infections and new coronavirus restrictions.

At 13:04 GMT, the EUR/USD is trading 1.1799, up 0.0020 or +0.17%.

In other news, Euro Zone industrial production unexpectedly declined in September, driven chiefly by a sharp fall in the output of durable consumer goods, sounding a negative note to a quarter that had begun strongly.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on Monday.

A move through 1.1920 will negate the closing price reversal top and signal a resumption of the uptrend, while a move through 1.1603 changes the main trend to down.

The minor trend is also up. The inside move suggests investor indecision and impending volatility.

The main range is 1.2011 to 1.1603. Its retracement zone is 1.1807 to 1.1855. Inside this zone is minor pivot resistance at 1.1832.

The short-term range is 1.1603 to 1.1920. Its retracement zone at 1.1762 to 1.1724 is support. This zone stopped the selling at 1.1745 on Wednesday.

The major support zone is 1.1691 to 1.1616.

Daily Swing Chart Technical Forecast

The EUR/USD is currently trading inside a pair of 50% level at 1.1762 to 1.1807. Trader reaction to these levels should determine the direction of the Forex pair today.

Bullish Scenario

A sustained move over 1.1807 will indicate the presence of buyers. The first two targets are 1.1832 and 1.1855. The latter is a potential trigger point for an acceleration to the upside with 1.1920 the next likely upside target.

Bearish Scenario

A sustained move under 1.1762 will signal the presence of sellers. This is followed by 1.1745 and 1.1724. Taking out 1.1724 could trigger an acceleration into 1.1691.

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

Economic Data Puts the Pound in the Spotlight, with Brexit Chatter also in Focus

Earlier in the Day:

It’s was a quiet start to the day on the economic calendar this morning. The British Pound was in action in the early part of the day.

The RICS House Price Balance stood at 68% in October, up from 62% in September. Economists had forecast 55% for the month. The numbers had a muted impact on the Pound, however, ahead of economic data due out later today.

With no material stats from the Asian region, sentiment towards the later COVID-19 vaccine news supported the Asian majors after the Dollar move on Wednesday.

For the Majors

At the time of writing, the Aussie Dollar was up by 0.07% to $0.7286, with the Kiwi Dollar up by 0.28% to $0.6901. The Japanese Yen was up by 0.15% to ¥105.27 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Finalized October inflation figures for Germany and Eurozone industrial production figures are due out.

Barring particularly dire numbers, however, the stats are likely to have a relatively muted impact on the EUR.

From the ECB, the Economic Bulletin for November is also due out and will garner plenty of attention.

The markets will be looking to get a sense of how the ECB sees the economic recovery ahead of next month’s policy decision. At the last ECB press conference, ECB President Lagarde had spoken of further support coming in December. Lagarde reaffirmed next month’s planned easing in a speech on Wednesday.

Away from the economic calendar, chatter from Capitol Hill, and updates on Brexit and COVID-19 will also influence.

At the time of writing, the EUR was up by 0.07% to $1.1785.

For the Pound

It’s a busy day ahead on the economic calendar. 3rd quarter GDP, industrial and manufacturing production, and trade data are due out later this morning.

Expect the numbers to influence, though, with the reintroduction of lockdown measures this month, any major upside in the Pound may be muted.

Late in the day, BoE Governor Bailey is scheduled to speak. There could be the talk of negative rates should the economic data disappoint.

Away from the economic calendar, however, Brexit and COVID-19 updates will likely remain the key drivers on the day.

At the time of writing, the Pound was up 0.01% to $1.3223.

Across the Pond

It’s a relatively quiet day ahead for the U.S Dollar. October inflation figures are due out later this afternoon, along with the weekly jobless claims figures.

While any softening of inflationary pressures tends to be Dollar negative, we would expect the jobless claims to be the key driver.

An unexpected rise in initial jobless claims will test support for riskier assets later in the day.

Away from the economic calendar, chatter from Capitol Hill and COVID-19 news updates will also influence.

At the time of writing, the Dollar Spot Index was down by 0.04% to 93.004.

For the Loonie

It’s a quiet day on the economic data front. There are no material stats to provide the Loonie with direction on the day.

A lack of stats will leave the Loonie in the hands of market risk sentiment and COVID-19 news updates.

On the oil front, the IEA’s monthly report will provide direction on the day.

At the time of writing, the Loonie was down by 0.01% to C$1.3064 against the U.S Dollar.

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