Earlier in the Day:
It was a relatively busy day on the economic calendar this morning. The Japanese Yen and Aussie Dollar were in action early in the day.
Away from the economic calendar, the markets responded to Trump’s announcement on Thursday of plans to unveil measures against China at the news conference later today.
Fiscal stimulus from Brussels and the easing of lockdown measures across the EU and the U.S had provided support to riskier assets ahead of today’s open.
Looking at the latest coronavirus numbers,
On Thursday, the number of new coronavirus cases rose by 112,124 to 5,900,627. On Wednesday, the number of new cases had risen by 110,221. The daily increase was higher than both Wednesday’s rise and 106,139 new cases from the previous Thursday.
France, Germany, Italy, and Spain reported 5,612 new cases on Thursday, which was up from 1,892 new cases on Wednesday. On the previous Thursday, 1,976 new cases had been reported.
From the U.S, the total number of cases rose by 22,413 to 1,768,216 on Thursday. On Wednesday, the total number of cases had risen by 20,392. On Thursday 21st May, a total of 28,089 new cases had been reported.
The uptick on Thursday will need to be monitored in the coming days. With the easing of lockdown measures now in the 4th week, it would be in the coming days that a 2nd wave would become evident…
For the Japanese Yen
Inflation was in focus in the early part of the day, along with industrial production and retail sales figures.
In May, the Ku-area of Tokyo saw inflationary pressures return, with core consumer prices rising by 0.20% In April, consumer prices had fallen by 0.10%, year-on-year.
According to the Ministry of Internal Affairs and Communication.
- Rising prices for clothes & footwear (+1.7%), furniture & household utensils (+1.7%), and culture & recreation (+1.2%) supported the rise.
- There were also increases in prices for medical care (+0.8%) and housing (+0.7%).
- Prices for Education (-8.9%) and fuel, light, & water charges (-1.9%) pinned back inflationary pressures, however.
- There were also declines in prices for transport & communication (-0.1%) and miscellaneous (-0.8%).
In April, industrial production slumped by 9.1%, based on prelim numbers, following a 3.7% decline in March. Economists had forecast a 5.1% slide.
According to the Ministry of Economy, Trade, and Industry,
Industries that mainly contributed to the decrease were:
- Motor vehicles, iron, steel & non-ferrous metals, and transport equipment (excl. motor vehicles).
Industries that mainly contributed to the increase were:
Forecasts for May were not much better, with the forecast for industrial production revised from -1.4% to -4.1%. For June, however, forecasts are for production to rise by 3.9%.
Retail sales also disappointed in April, with lockdown and social distancing measures weighing.
According to the Ministry of Economy, Trade, and Industry, retail sales tumbled by 13.7% in April, year-on-year, following a 4.7% slide in March. Economists had forecasts an 11.50% decline.
The Japanese Yen moved from ¥107.701 to ¥107.608 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.22% to ¥107.41 against the U.S Dollar.
For the Aussie Dollar
Private sector credit stalled in April, following a 1.10% increase in March.
According to figures released by RBA,
- Business credit rose by 0.1%, following a 3.1% rise in March.
- Personal credit slid by 3.0%, following a 1.4% decline in March.
- Housing credit rose by 0.2%, which was down from a 0.3% rise in March.
The Aussie Dollar moved from $0.66312 to $0.66315 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.08% at $0.6642.
At the time of writing, the Kiwi Dollar was down by 0.11% to $0.6203.
The Day Ahead:
For the EUR
It’s a busy day ahead on the economic calendar. Key stats include French and German retail sales figures for April and the Eurozone prelim inflation numbers for May.
Prelim inflation figures for France and Italy and 2nd estimate GDP numbers for France are also due out.
We will expect the numbers to have a muted impact on the EUR, however. The EU’s recovery plan and the continued easing of lockdown measures remain positives.
While COVID-19 news and updates remain EUR positive, the markets will need to monitor the number of new cases. On Thursday, there was an uptick. If an upward trend begins, this could question member state plans to ease lockdown measures further.
From the early part of the day, it was risk aversion that pinned back the EUR as the markets await Trump’s news conference later today.
At the time of writing, the EUR was up by 0.07% to $1.1085.
For the Pound
It’s yet another quiet day ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.
Through the day, expect market risk sentiment and any Brexit chatter to be key drivers.
At the time of writing, the Pound was up by 0.01% to $1.2322.
Across the Pond
It’s another busy day ahead on the U.S economic calendar. Economic data includes April inflation and personal spending figures and May consumer sentiment and Chicago PMI numbers.
Expect the May figures to have the greatest influence, with the markets likely to brush aside April numbers.
Outside of the numbers, FED Chair Powell is scheduled to speak. Any commentary on the U.S economy and monetary policy will garner plenty of attention.
The main event of the day, however, is Trump’s news conference. What does the U.S President have in store for China?
The Dollar Spot Index was up by 0.02% to 98.407 at the time of writing.
For the Loonie
It’s also a busy day on the economic calendar. Key stats include 1st quarter GDP numbers and April’s RMPI.
Expect the GDP figures to have some influence, though the markets are expecting some quite dire numbers. Anything better than forecast should be Loonie positive…
Crude oil prices and market risk sentiment will be the key driver on the day, however.
At the time of writing, the Loonie was down by 0.10% to C$1.3777 against the U.S Dollar.
For a look at all of today’s economic events, check out our economic calendar.