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.

AUD/USD and NZD/USD Fundamental Daily Forecast – Australia Posts Strong GDP Numbers, but Recession is Not Over

The risk-sensitive currencies are trading mixed on Wednesday with the Aussie edging higher after an upbeat report showed Australia’s economy rebounded more strongly than expected in the third quarter. The Kiwi is dipping on profit-taking, but holding steady after hitting its highest level since April 2018 in the overnight trade.

At 10:29 GMT, the AUD/USD is trading .7377, up 0.0006 or +0.07% and the NZD/USD is at .7062, down 0.0003 or -0.05%. This is down from a high of .7084.

Australia’s Economy Rebounds Sharply in Third-Quarter from COVID-19 Recession

Australia’s economy rebounded sharply in the third quarter from a coronavirus-induced recession as consumer spending surged though the country’s top central banker signaled monetary policy will stay accommodative for a while.

Data out earlier showed the A$2 trillion ($1.5 trillion) economy expanded by a bigger than expected 3.3% in the September quarter, following a 7% contraction in June, as the country largely got COVID-19 under control.

The rebound was led by household spending, which rose 7.9%, driven by massive fiscal and monetary stimulus since March.

Economic growth is expected to be “solidly positive” in the December quarter as well, Reserve Bank of Australia (RBA) Governor Philip Lowe said, underscoring the country’s success in curbing the pandemic.

Escalating Tensions with China Could Weigh on Positive Outlook

Despite the strong rebound in growth, Australia is not yet out of the woods, as escalating tensions with top trading partner China hang heavily on the outlook.

Australian Treasurer Josh Frydenberg said on Wednesday the deteriorating trade relationship with China was a “very serious” matter though domestic consumption was key to Australia’s post-pandemic recovery.

China has so far curtailed Australia’s exports of lobsters, beef, timber, coal and wine though the broader economic hit is expected to be minimal as long as iron ore is spared, analysts said.

Agriculture exports account for just 0.02% of Australia’s annual output, while iron ore exports account for 7.5% of GDP.

“We expect some softening in tensions, especially given China’s multi-decade need to source key bulk commodities and metals from Australia,” said Paul Xiradis, chief investment officer at Ausbil.

Daily Forecast

The strong GDP data is just a start, but the economy seems to be on the right track toward a recovery from the pandemic. Economic output is still down 3.8% over the year after Australia entered its first recession in three decades in the first half of 2020 due to coronavirus-driven lockdowns.

Despite the solid data, there is still a lot of uncertainty about the economy, which is leading officials to predict a “bumpy and uneven” recovery.

Meanwhile, the Australian Dollar as well as the New Zealand Dollar are going to continue to receive support from increasing demand for riskier currencies tied to the COVID-19 vaccine and expectations of further stimulus from the U.S. government.

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.

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.

AUD/USD and NZD/USD Fundamental Weekly Forecast – Expectations of More Stimulus from Fed is Supportive News

The Australian and New Zealand Dollars posted solid gains last week as optimism about a vaccine-driven global recovery led the currencies to their highest levels in months and put the Kiwi Dollar on track for a monthly gain of over 6%. The Aussie is headed toward a 5.1% gain in November, its largest monthly gain since April.

Demand for higher risk currencies was the primary reason for the rally as investors bet on vaccine hopes and while President-elect Joe Biden received approval from the government to begin his transition into the Whitehouse. The Kiwi was also helped by investors scaling back expectations for more policy easing given the risk of surging house prices.

Last week, the AUD/USD settled at .7386, up 0.0081 or +1.11% and the NZD/USD finished at .7025, up 0.0093 or +1.34%.

Weekly Outlook

This week, investors expect data on Wednesday will show Australia’s economy has rebounded sharply from its first recession in three decades, according to a Reuters poll.

They will also keep an eye on commentary from the Reserve Bank of Australia, which is expected to hold its cash rate at a historic low of 0.1% on Tuesday.

All eyes will also be on the U.S. monthly employment report on December 4, with economists polled by Reuters expecting unemployment to dip to 6.8% from 6.9%, but to remain above the 4.5% rate in March, before much of the U.S. economy went into lockdown.

A weak report is likely to put pressure on Congress to pass a new stimulus bill, but that next package is now expected only after Biden is sworn in on January 20.

Traders expect the jobs report to reinforce expectations of a setback in the U.S. recovery as several states instituted shutdowns to prevent the spread of the virus. This is leading to speculation that the Fed may increase its government bond purchases or adjust the maturity of bonds purchased.

The Fed minutes released last Wednesday confirmed that policymakers in November discussed how the central bank’s asset purchases could be modified to maximize support for the economy.

Additional monetary stimulus is likely is expected to weigh on U.S. interest rates which should make the Aussie and Kiwi more attractive assets.

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.

The Week Ahead – Economic Data, COVID-19 Vaccine Updates, and Brexit in Focus

On the Macro

It’s a particularly busy week ahead on the economic calendar, with 88 stats in focus in the week ending 4th December. In the week prior, 50 stats had been in focus.

For the Dollar:

It’s a busy week ahead on the economic data front.

In the 1st half of the week, the market’s preferred ISM Manufacturing PMI and ADP Nonfarm Employment Change figures are due out.

With plenty of focus on labor market conditions, the ADP figures could overshadow the ISM numbers.

On Thursday, however, both the initial jobless claims and the ISM Non-Manufacturing PMIs will draw plenty of attention.

At the end of the week, nonfarm payrolls and November’s unemployment rate will provide riskier assets with direction.

Weak numbers could force the FED into action should lawmakers continue to grapple over a stimulus package.

Away from the economic calendar, COVID-19 and U.S politics will continue to remain the key drivers, however.

The Dollar Spot Index ended the week down by 0.65% to 91.790.

For the EUR:

It’s a busy week ahead on the economic data front.

Private sector PMIs for Spain and Italy and finalized PMIs for France, Germany, and the Eurozone are due out.

On Tuesday, German unemployment figures will also be in focus alongside the manufacturing numbers.

Mid-week, German retail sales figures are due out ahead of German factory order numbers on Friday.

Other stats in the week include prelim November inflation and Eurozone unemployment and retail sales figures.

These numbers are unlikely to have a muted impact on the EUR, however.

Away from the economic calendar, COVID-19 news updates will remain a key driver in the week. Expect Brexit to also influence…

The EUR ended the week up by 0.89% to $1.1963.

For the Pound:

It’s another relatively quiet week ahead on the economic calendar.

Finalized private sector PMIs are due out on Tuesday and Thursday, with November’s construction PMI on Friday.

Barring any downward revisions, however, the stats are likely to have a muted impact on the Pound.

Sentiment towards Brexit and COVID-19 will remain the key drivers in the week.

The Pound ended the week up by 0.27% to $1.3311.

For the Loonie:

It’s a particularly busy week ahead on the economic calendar.

In the 1st half of the week, 3rd quarter and October GDP and RMPI numbers are in focus. Expect the GDP numbers to have the greatest impact.

The focus will then shift to trade and employment figures due out on Friday. Expect the employment numbers to have the greatest impact at the end of the week.

From elsewhere, private sector PMIs numbers from China, the Eurozone, and the U.S will also provide direction.

Away from the calendar, COVID-19 vaccine news and stimulus talk from Capitol Hill will also influence.

The Loonie ended the week up by 0.81% to C$1.2989 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively busy week ahead on the economic calendar.

AIG manufacturing index figures are due out ahead of 3rd quarter GDP numbers on Wednesday.

The focus will then shift to trade data and retail sales figures due out on Thursday and Friday.

On the monetary policy front, the RBA policy decision on Tuesday will also draw plenty of attention. While the markets are expected rates to be left unchanged, there could be the talk of further support via its bond-buying program.

From elsewhere, private sector PMI numbers from China will also influence.

Away from the economic calendar, COVID-19 news will continue to provide direction. U.S politics could also play a role should lawmakers make progress towards a stimulus package.

The Aussie Dollar ended the week up by 1.16% to $0.7387.

For the Kiwi Dollar:

It’s a relatively quiet week ahead on the economic calendar.

November business confidence figures at the start of the week will draw interest. With the RBNZ assuring continued support disappointing numbers would test Kiwi Dollar support.

Late in the week, building consent figures for October would likely have a muted impact on the Kiwi.

From elsewhere, private sector PMI numbers from China will also provide direction in the week ahead.

The Kiwi Dollar ended the week up by 1.41% to $0.7027.

For the Japanese Yen:

It is a relatively quiet week on the economic calendar.

October industrial production and retail sales figures are due out on Monday. Both sets of numbers will be of interest, though the impact on the Yen will likely be limited.

The focus will then shift to finalized manufacturing and services PMIs are due out on Tuesday and Thursday.

Barring marked deviation from prelim figures, however, the markets will likely brush aside the numbers.

From elsewhere, economic data from China will influence.

Away from the economic calendar, any further positive updates on COVID-19 vaccines would likely ease demand for the Yen.

The Japanese Yen ended the week down by 0.22% to ¥104.09 against the U.S Dollar.

Out of China

It’s a relatively busy week ahead on the economic data front.

Private sector PMI numbers for November are due out in the week. The market’s preferred Caixin Manufacturing PMI on Tuesday will likely have the greatest impact.

Economic data from China has continued to impress. Any disappointing numbers would test market risk appetite early in the week.

The Chinese Yuan ended the week down by 0.23% to CNY6.55781 against the U.S Dollar.

Geo-Politics

U.S Politics

Following last week’s Thanksgiving holidays, the markets will look towards Capitol Hill. There will be two areas of focus. Firstly, any government interventions to curb the spread of the COVID-19 pandemic and, secondly, stimulus talks.

A failure to make progress on stimulus and reintroduction of lockdown measures would be the worst-case scenario for riskier assets.

Brexit

For the Pound and the UK economy, Brexit remains a key driver. Talks resumed on the weekend and time is rapidly running out.

With U.S President-Elect Biden also getting involved, the markets are hoping for an imminent deal.

The Weekly Wrap – COVID-19 Vaccine News Supported Riskier Assets in the Week

The Stats

It was a quieter week on the economic calendar, in the week ending 27th November.

A total of 50 stats were monitored, following 62 stats from the week prior.

Of the 50 stats, 25 came in ahead of forecasts, while 21 economic indicators came up short of forecasts. 4 stats were in line with forecasts in the week.

Looking at the numbers, 16 of the stats reflected an upward trend from previous figures. Of the remaining 35 stats, 31 reflected a deterioration from previous.

For the Greenback, it was a 2nd consecutive week in the red. The Dollar Spot Index fell by 0.65% to 91.790. In the week prior, the Dollar had fallen by 0.39% to 92.392.

Hopes of a COVID-19 vaccine before the end of the year provided riskier assets with support in the week. Softer demand for the Greenback came in spite of disappointing economic data from the U.S and the continued rise in new COVID-19 cases.

Out of the U.S

It was a busy week on the economic data front.

In the 1st half of the week, prelim private sector PMI numbers for November impressed. The all-important services PMI rose from 56.9 to 57.7, with the manufacturing PMI climbing from 53.4 to 56.7.

Consumer sentiment waned in November, however, with the CB Consumer Confidence Index falling from 101.4 to 96.1. This was to be expected, with the latest spike in new COVID-19 cases and dire labor market conditions.

Mid-week, the weekly jobless claims, core durable goods orders, 3rd quarter GDP, and personal spending figures were in focus.

The stats were mixed. Initial jobless claims rose from 742k to 778k in the week ending 20th November. The latest figure further confirmed that the labor market recovery had stalled.

Core durable goods orders impressed with a 1.3% rise in October, with personal spending rising by 0.5% to come in ahead of forecasts. Spending was down from a 1.2% rise in September, however.

2nd estimate GDP numbers for the 3rd quarter were in line with 1st estimates, which came up short of a forecasted upward revision.

Other stats ahead of the Thanksgiving holidays included finalized consumer sentiment and inflation figures.

The Michigan Consumer Sentiment Index came in at 76.9, down from a prelim 77.0. Of greater significance was softer inflationary pressures in October. The annual rate of inflation eased from 1.6% to 1.4%.

On the monetary policy front, the FOMC meeting minutes had a muted impact. The FED focus on the COVID-19 pandemic was somewhat dated following the latest COVID-19 vaccine updates.

In the equity markets, the NASDAQ rose by 2.96%, while the Dow and S&P500 gaining 2.21% and 2.27% respectively.

Out of the UK

It was a relatively quiet week on the economic data front.

Prelim private sector PMI numbers for November were in focus at the start of the week.

It was a mixed bag, with manufacturing sector activity seeing a pickup, while the services sector contracted.

The all-important services PMI slid from 52.3 to 45.8 as lockdown measures hit the sector.

Away from the economic calendar, the Pound did find some support on hopes of an imminent Brexit deal, however.

In the week, the Pound rose by 0.27% to $1.3311. In the week prior, the Pound had risen by 0.65% to $1.3275

The FTSE100 ended the week up by 0.25%, following on from a 0.56% gain in the previous week.

Out of the Eurozone

It was a busy week on the economic data front.

Prelim private sector PMIs for France, Germany, and the Eurozone were in focus at the start of the week.

With lockdown measures in place, the services sector took a hit, with the Eurozone Services PMI falling from 46.9 to 41.3.

Eurozone manufacturing sector activity eased as a result of a contraction in France, while Germany continued to report solid growth in the sector.

On Tuesday, the focus shifted to Germany. Finalized 3rd quarter GDP and November’s IFO Business Climate figures were in focus.

While an upward revision to 3rd quarter GDP numbers was positive, a slide in business sentiment disappointed. The Ifo Business Climate Index fell from 92.5 to 90.7.

The markets were expecting a deterioration in sentiment, however, which limited the impact on the EUR.

In the 2nd half of the week, Germany’s GfK Consumer Climate indicator reflected consumer sentiment towards the COVID-19 pandemic. A reintroduction of containment measures dragged the headline indicator down from -3.2 to -6.7.

From France, finalized 3rd quarter GDP, October consumer spending, and prelim inflation figures for November were in focus on Friday.

Consumer spending and inflation were the main areas of focus, with the markets less interested in 3rd quarter numbers in spite of an upward revision to 18.7%.

The stats were skewed to the positive, with consumer spending jumping by 3.7%, following a 4.4% slide in September.

Consumer prices were also on the rise. In November, consumer prices rose by 0.2%. Prices had been flat in October.

From the ECB, November’s financial stability review and monetary policy meeting minutes delivered a grim view. There was EUR resilience, however, coming from progress towards a COVID-19 vaccine.

For the week, the EUR rose by 0.89% to $1.1963. In the week prior, the EUR had risen by 0.19% to $1.1857.

For the European major indexes, it was another bullish week. The CAC40 rose by 1.86%, with the DAX30 and EuroStoxx600 gaining 1.51% and 0.93% respectively.

For the Loonie

It was a particularly quiet week on the economic data front.

There were no material stats to provide direction. The lack of stats left the Loonie in the hands of COVID-19 news updates and crude oil inventory numbers.

In the week ending 27th November, the Loonie rose by 0.81% to C$1.2989. In the week prior, the Loonie had risen by 0.32% to C$1.3095.

Elsewhere

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

In the week ending 27th November, the Aussie Dollar rose by 1.16% to $0.7387, with the Kiwi Dollar rallying by 1.41% to end the week at $0.7027.

For the Aussie Dollar

It was a relatively quiet week on the economic calendar.

Key stats included 3rd quarter construction work down and new capital expenditure figures.

The stats were skewed to the negative, with both taking a larger hit than expected in the quarter.

While the stats were disappointing, hopes of a COVID-19 vaccine by the end of the year delivered support.

For the Kiwi Dollar

It was a busier week on the economic calendar.

3rd quarter retail sales and October trade figures were in focus, with both sets of numbers beating forecasts.

Retail sales surged by 28%, reversing a 14.6% slide from the 2nd quarter, with the annual trade deficit widening to a 28-year high NZ$2,190m.

From the RBNZ, November’s Financial Stability report also delivered support to the Kiwi Dollar, while risks remained tilted to the downside.

For the Japanese Yen

It was a quiet week on the economic calendar.

November inflation figures at the end of the week failed to move the dial. A pickup in deflationary pressures was aligned with the market outlook. Tokyo’s core consumer prices fell by 0.7%, following a 0.5% decline in October.

While the inflation figures disappointed, updates on the COVID-19 vaccine eased demand for the Yen.

The Japanese Yen fell by 0.22% to ¥104.09 against the U.S Dollar. In the week prior, the Yen had risen by 0.74% to ¥103.86.

Out of China

It was a particularly quiet week on the economic data front.

There were no material stats to provide the Yuan with direction in the week.

In the week ending 27th November, the Chinese Yuan fell by 0.23% to CNY6.5781. The Yuan had risen by 0.66% to CNY6.5630 in the week prior.

The CSI300 rose by 0.76%, with the Hang Seng ended the week up by 1.68%.

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.

AUD/USD Strong Bullish Move Expected to Continue

Commodity currencies such as the AUD/USD and NZD/USD enjoy bullish flows as the uptrend continues.

The AUD/USD is very bullish. It is making a progress towards 3 month highs and I expect trend to continue. Buying the dips is the best possible scenario. There are 2 POC zones. 0.7295-0.7305 is the first POC zone and 88.6 and D L4 – 0.7263-0.7275 is the 2nd. The target is 0.7327. If the pair doesn’t retrace that low we should see a retest of 0.7340 and continuation up.

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

 

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.

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.

The Week Ahead – Private Sector PMIs, COVID-19, Brexit, and Capitol Hill in Focus

On the Macro

It’s a busy week ahead on the economic calendar, with 52 stats in focus in the week ending 27th November. In the week prior, 62 stats had also been in focus.

For the Dollar:

It’s a busy but shortened week ahead on the economic data front.

In the 1st half of the week, prelim November private sector PMIs and consumer confidence figures are in focus.

Expect the Services PMI and CB Consumer Confidence figures to be the key drivers.

The focus will then shift to a particularly busy Wednesday.

Key stats include the weekly jobless claims, core durable goods orders, and personal spending figures.

2nd estimate GDP numbers for the 3rd quarter are also due out. Barring a marked deviation from 1st estimate, however, the numbers should have a muted impact on risk sentiment.

Other stats due out in the week include house price, trade, inflation, new home sales, and finalized consumer sentiment figures.

We don’t expect these to have a material impact on the Dollar, however.

On the monetary policy front, the FOMC minutes due out late in the week will also draw attention. Any contingency plans, in event of lawmakers failing to deliver an additional stimulus, would draw interest.

Away from the economic calendar, COVID-19 and U.S politics will continue to remain the key drivers, however.

The Dollar Spot Index ended the week down by 0.39% to 92.392.

For the EUR:

It’s a busy week ahead on the economic data front.

Prelim November private sector PMI figures for France, Germany, and the Eurozone are due out on Monday.

Expect plenty of influence from the numbers, with COVID-19 containment measures likely to hit service sector activity.

On Tuesday, the focus will shift to finalized GDP and November Ifo business sentiment figures from Germany.

With lockdown measures in place, the GDP numbers are unlikely to have too much influence.

On Thursday, German consumer sentiment figures are due out that will also draw plenty of attention.

At the end of the week, French consumer spending, inflation, and finalized GDP numbers are due out.

Expect inflation and consumer spending figures to have the greatest impact.

Eurozone consumer confidence and French jobseeker totals due out in the week should have a muted impact on the EUR.

On the monetary policy front, the ECB monetary policy meeting minutes are due out on Thursday. The markets will be looking for an indication of what policy easing measures are likely next month.

Away from the economic calendar, COVID-19 news updates will remain a key driver in the week.

The EUR/USD ended the week up by 0.19% to $1.1857.

For the Pound:

It’s a relatively quiet week ahead on the economic calendar.

Prelim November private sector PMIs are due out at the start of the week. With lockdown measures in place, expect plenty of influence from the PMIs.

The Services PMI would likely have the greatest impact on the Pound.

Away from the economic calendar, the markets will be looking for some updates on Brexit.

The GBP/USD ended the week up by 0.65% to $1.3275.

For the Loonie:

It’s a particularly quiet week ahead on the economic calendar.

There are no material stats due out of Canada to influence the Loonie in the week.

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

The Loonie ended the week up by 0.32% to C$1.3095 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a quiet week ahead on the economic calendar.

3rd quarter construction work done and private capital expenditure figures are due out on Wednesday and Thursday.

The CAPEX numbers will likely have a greater influence in the week.

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

The Aussie Dollar ended the week up by 0.44% to $0.7302.

For the Kiwi Dollar:

It’s a relatively quiet week ahead on the economic calendar.

3rd quarter retail sales figures are due out on Monday. With the RBNZ ready to drop rates into negative territory, expect sensitivity to the numbers.

The focus will then shift to October trade data, due out on Thursday.

From the RBNZ, the RBNZ Financial Stability Report and a Governor Orr speech on Wednesday will draw plenty of attention.

The Kiwi Dollar ended the week up by 1.23% to $0.6929.

For the Japanese Yen:

It is a quieter week on the economic calendar, with Japanese markets closed on Monday.

November inflation figures are due out on Friday ahead of October retail sales figures on Saturday.

We don’t expect the stats to influence, with COVID-19 remaining the key driver near-term.

The Japanese Yen ended the week up by 0.74% to ¥103.86 against the U.S Dollar.

Out of China

It’s a quiet week ahead on the economic data front.

There are no material stats to provide direction in the week. A lack of stats will leave foreign policy and sentiment towards Hong Kong in focus.

The Chinese Yuan ended the week up by 0.66% to CNY6.5630 against the U.S Dollar.

Geo-Politics

U.S Politics

The focus in the week will be on Capitol Hill, as the markets look for progress towards a COVID-19 stimulus package.

With the COVID-19 2nd wave hitting the U.S, failure to make progress will test support for riskier assets.

From the Oval Office, will this be the week when President Trump concedes? To date, Trump has failed to make any headway in reversing the outcome of the Presidential Election.

Brexit

For the Pound and the UK economy, Brexit will remain a key driver. After talks were suspended last week, will there be some form of an extension to the transition period?

News from the weekend was positive, suggesting progress towards a deal, despite differences remaining.

The Weekly Wrap – COVID-19 and U.S Politics Drove Risk Sentiment

The Stats

It was a busier week on the economic calendar, in the week ending 20th November.

A total of 62 stats were monitored, following 48 stats from the week prior.

Of the 62 stats, 33 came in ahead of forecasts, with 20 economic indicators came up short of forecasts. 9 stats were in line with forecasts in the week.

Looking at the numbers, 31 of the stats also reflected an upward trend from previous figures. Of the remaining 31 stats, 25 reflected a deterioration from the previous.

For the Greenback, it was back into the red after the previous week’s partial recovery. The Dollar Spot Index fell by 0.39% to 92.392. In the week prior, the Dollar had risen by 0.53% to 92.721.

While a continued spike in new COVID-19 cases tested support for riskier assets, progress towards a COVD-19 vaccine delivered support in the week. Impressive efficacy rates from Moderna Inc. and Pfizer Inc. eased demand for the Dollar in the week.

Out of the U.S

It was a relatively busy week on the economic data front.

In the 1st half of the week, October retail sales and industrial production figures were in focus.

The stats were skewed to the negative, with retail sales disappointing at the turn of the quarter.

While industrial production figures were positive, consumer spending remains the key driver for the U.S economy. Continued failure to deliver on a COVID-19 stimulus package is likely to deliver weaker numbers ahead on the spending front.

In the 2nd half of the week, the Philly FED Manufacturing and weekly jobless claims figures also disappointed.

Initial jobless claims rose from 711k to 742k in the week ending 13th November. The Philly FED Manufacturing Index fell from 32.3 to 26.3.

Other stats in the week included manufacturing numbers from NY State, housing sector data, and inventories.

The stats had a muted impact on the Dollar and broader market risk sentiment, however.

In the equity markets, the NASDAQ rose by 0.22%, while the Dow and S&P500 fell by 0.73% and by 0.77% respectively.

Out of the UK

It was a relatively busy week on the economic data front.

Early in the week, October inflation figures were in focus. A pickup in inflationary pressures was Pound positive. The annual rate of inflation picked up from 0.5% to 0.7%.

That was the only positive, however, with consumer prices stalling in October and wholesale inflationary pressures easing.

Mid-week, the CBI Industrial Trend Orders index also came in negative, with a fall from -34 to -40 in November.

Wrapping things up were retail sales figures at the end of the week. In October, core retail sales rose by 1.3%, following a 1.5% increase in September. Retail sales increased by 1.2%, following a 1.4% rise in September. Both sets of figures came in ahead of forecasts, whilst softer than September figures.

Year-on-year, core retail sales were up by 7.8%, with retail sales up by 5.8%.

Away from the economic calendar, negotiators suspended Brexit negotiations. Members of the EU negotiating team self-isolated due to one member testing positive for COVID-19. Talks of a possible extension provided the Pound with support as did hopes of an agreement.

In the week, the Pound rose by 0.65% to $1.3275. In the week prior, the Pound had risen by 0.26% to $1.3189.

The FTSE100 ended the week up by 0.56%, following on from a 6.88% gain in the previous week.

Out of the Eurozone

It was a relatively quiet week on the economic data front.

Finalized October inflation figures for Italy and the Eurozone provided little direction in the week.

The finalized numbers were in line with prelim figures, with the Eurozone’s core annual rate of inflation holding steady at 0.2%.

Following ECB President Lagarde’s assurances of more monetary policy support, there was little EUR reaction.

At the end of the week, wholesale inflation figures from Germany also had a muted impact.

With the COVID-19 2nd wave hitting the Eurozone, the Eurozone’s consumer confidence figure drew some attention.

The Flash Consumer Confidence Indicator fell from -15.5 to -17.6, which was better than a forecasted -17.7. Downside risks to the economic recovery were affirmed by the number. Lockdown measures are expected to sink the Eurozone economy, as a result, in the 4th quarter.

For the week, the EUR rose by 0.19% to $1.1857. In the week prior, the EUR had fallen by 0.34% to $1.1834.

For the European major indexes, it was another bullish week. The CAC40 rallied by 2.15%, with the DAX30 and EuroStoxx600 gaining 0.46% and 1.15% respectively.

For the Loonie

It was a busy week on the economic data front.

Manufacturing and wholesale sales figures for September were skewed to the positive providing support.

Mid-week, October inflation figures were also Loonie positive, with the core annual rate of inflation holding steady at 1%. Rising core consumer prices and consumer prices in October delivered support.

At the end of the week, retail sales figures for September were also Loonie positive.

Core retail sales rose by 1.0%, month-on-month, following on from a 0.5% increase in August. Retail sales were also on the up, rising by 1.1% off the back of a 0.4% increase in August.

While the stats were skewed to the positive, progress towards a COVID-19 vaccine was key in the week.

In the week ending 20th November, the Loonie rose by 0.32% to C$1.3095. In the week prior, the Loonie had fallen by 0.67% to C$1.3137.

Elsewhere

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

In the week ending 20th November, the Aussie Dollar rose by 0.44% to $0.7302, with the Kiwi Dollar rallying by 1.23% to end the week at $0.6929.

For the Aussie Dollar

It was a relatively quiet week on the economic calendar.

Key stats included 3rd quarter wage growth and October employment and retail sales figures.

While wage growth figures disappointed, employment and retail sales figures impressed.

A 178.8k jump in employment and a 1.6% increase in retail sales were positives for the Aussie Dollar.

On the monetary policy front, however, the RBA meeting minutes revealed the willingness to deliver more support. While unwilling to drop rates into negative territory, the commitment to delivering more support pegged the Aussie Dollar back.

COVID-19 vaccine news provided support, however, to offset the negative sentiment towards the rise in new cases.

For the Kiwi Dollar

It was a particularly quiet week on the economic calendar.

3rd quarter wholesale inflation figures were in focus. A pickup in input prices was considered Kiwi positive, though falling output prices remained a concern.

While the stats were positive, positive economic data from China and progress towards a COVID-19 vaccine were positives.

For the Japanese Yen

It was a busy week on the economic calendar.

3rd quarter GDP numbers were in focus at the start of the week. While rebounding from the 2nd quarter woes, growth was not enough to reverse the contraction from the 2nd quarter.

Quarter-on-quarter, the economy grew by 5%, partially reversing an 8.2% contraction from the 2nd quarter.

Trade data also failed to impress mid-week, with imports tumbling by 13.3% to widen the trade surplus. Exports also declined, though at a slower pace than in September.

Wrapping things up were inflation figures at the end of the week. A buildup of deflationary pressures was yet another negative for the Japanese economy.

A market grappling with a continued spike in new COVID-19 cases and hopes of a vaccine supported the Yen, however.

The Japanese Yen rose by 0.74% to ¥103.86 against the U.S Dollar. In the week prior, the Yen had fallen by 1.24% to ¥104.63.

Out of China

It was a busy week on the economic data front.

October fixed asset investment, industrial production, retail sales, and unemployment figures were in focus.

The stats were skewed to the positive, reaffirming market sentiment towards the Chinese economic recovery.

Fixed asset investments rose by 1.8%, year-on-year, following a 0.8% rise in September. Industrial production increased by a further 6.9%, following a 6.9% rise in September.

Retail sales also impressed, jumping by 4.3%. In September, retail sales had risen by 3.3%.

Labor market conditions improved, with the unemployment rate falling from 5.4% to 5.3%.

The figures continued to reflect Beijing’s goal to reignite the economy from within.

In the week ending 13th November, the Chinese Yuan rose by 0.66% to CNY6.5630. In the week prior, the Yuan had risen by 0.09% to CNY6.6065.

The CSI300 rose by 1.78%, with the Hang Seng ended the week up by 1.13%.

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.

Join the “Classics without Borders” Contest and Get Real Money Prizes

FXOpen has been pleasing traders with its Forex contests for many years, and this time it is launching the contest for beginners and those who have registered with FXOpen no earlier than January 2020. 10 best traders will share the prize fund of 1500 USD.

The “Classics without borders” contest starts on November 30, 2020 and will last until December 24, 2020. Registration is open now and will be closed on December 13, 2020.

Terms of the contest:

  • Start deposit: 5000 USD;
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  • Trading instruments: EUR/USD, GBP/USD, USD/JPY, USD/CHF, USD/CAD, AUD/USD, NZD/USD, EUR/GBP and stocks;
  • Account type: contest demo ECN;
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Terms for receiving the prize:

It is required to increase the initial deposit by at least 20%, and to make at least 10 trades with total volume of 10 lots. The winners will be the best 10 Equity traders who have met the above conditions.

How to join the contest?

New users must register in ForexCup and join the contest with data from your personal account. Existing FXOpen clients have to pass verification in MyFXOpen and join the competition with data from MyFXOpen or ForexCup. It should be noted that all contest accounts are blocked until the contest starts.

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AUD/USD and NZD/USD Fundamental Daily Forecast – “Risk-Off” Sentiment Encouraging Profit-Taking

The Australian and New Zealand Dollars are trading sharply lower on Thursday as European stocks weakened shortly after the opening and as U.S. stock index futures retreated as investors feared another round of shutdowns due to soaring coronavirus cases in Europe and the United States.

Optimistic news on COVID-19 vaccines had been propping up the global equity markets, creating demand for higher risk currencies like the Aussie and Kiwi. However, signs of further COVID-19 restrictions in the U.S. are threatening the pace of the economic recovery, which is encouraging higher risk asset investors to book profits while increasing the appeal of the safe-haven U.S. Dollar.

At 09:03 GMT, the AUD/USD is trading .7267, down 0.0039 or -0.54% and the NZD/USD is at .6886, down 0.0037 or -0.54%.

Australia October Employment Soars, Jobless Rate Ticks Up

Australian jobs surged past all expectations in October, though the unemployment rate still ticked up to 7% as more people went out looking for work, Reuters reported.

Figures from the Australian Bureau of Statistics (ABS) on Thursday showed employment escalated by a solid 178,800 in October, after slipping in September.

Economists polled by Reuters were predicting a fall of 30,000 with the employment rate rising to 7.2%.

“This strong increase means that employment in October was only 1.7% below March, and reflects a large flow of people from outside the labor force back into employment,” Bjorn Jarvis, head of Labor Statistics at the ABS, said.

Daily Forecast

Look for the Aussie and Kiwi to continue to retreat throughout session if the “risk-off” tone spreads to the U.S. cash stock market on Thursday’s opening.

Today’s Australian employment data clearly indicates the positive impacts of well-timed fiscal and monetary stimulus from the government and central bank, respectively, however, although the overall jump in the number of jobs created far exceeded expectations, the numbers highlight the challenges for the recession-stricken economy with the unemployment rate widely to peak around 8%, according to economist predictions.

With the Aussie and Kiwi in uptrends, this particular break is likely to be a correction into a value area rather than the start of a prolonged downtrend.

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.