It was a relatively busy week on the economic calendar, in the week ending 19th February.
A total of 72 stats were monitored, following 33 stats from the week prior.
Of the 72 stats, 48 came in ahead forecasts, with 22 economic indicators coming up short of forecasts. There were 2 stats that were in line with forecasts in the week.
Looking at the numbers, 41 of the stats reflected an upward trend from previous figures. Of the remaining 31 stats, 30 reflected a deterioration from previous.
For the Greenback, it was a 2nd consecutive weekly loss, marking just the 3rd weekly loss in 7-weeks. The Dollar Spot Index fell by 0.13% to 90.364. In the previous week, the Dollar had fallen 0.62% to 90.480.
Out of the U.S
It was a busier week on the economic data front.
In the 1st half of the week, NY Empire State Manufacturing, retail sales, and industrial production figures were in focus.
The stats were skewed to the positive, with core retail sales jumping by 5.9% in January. In December, core retail sales had fallen by 1.8%.
Retail sales figures were also impressive, rising by 5.3% to reverse a 1% fall from December.
Industrial production rose by 0.9% in January, following a 1.3% increase in December.
Also positive was a pickup in manufacturing sector activity in New York State. In February, the NY Empire State Manufacturing Index increased from 3.5 to 12.1.
Through the 2nd half of the week, the stats were more mixed.
Weekly jobless claims figures disappointed on Thursday. In the week ending 12th February, initial jobless claims rose from 848k to 861k. Economists had forecast a fall to 765k.
The Philly FED Manufacturing Index fell from 26.5 to 23.1 in February, also a negative for the Dollar.
Wrapping things up at the end of the week were prelim private sector PMIs for February.
In February, the all-important services PMI rose from 58.3 to 58.9, while the manufacturing PMI fell from 59.2 to 58.5.
On the monetary policy front, the FOMC meeting minutes assured the markets that policy would remain unchanged for some time.
Ahead of the minutes there had been some concern of a tapering to the bond purchasing program. The minutes suggested otherwise.
In the equity markets, the NASDAQ and S&P500 fell by 1.57% and by 0.71% respectively, while the Dow rose by 0.11%.
Out of the UK
It was a relatively busy week on the economic data front.
Mid-week, January inflation figures came in better than expected, giving the Pound a boost. The annual rate of inflation ticked up from 0.6% to 0.7%.
The uptick came in spite of consumer prices falling by 0.2%, month-on-month.
At the end of the week retail sales and private sector PMI numbers were also in focus.
Core retail sales slumped by 8.8% in January, reversing a modest 0.4% gain from December.
Retail sales slid by 8.2%, reversing a 0.3% rise from December. Both sets of numbers were far worse than forecasts, with the slide in February dragging retail sales into the deep red year-on-year.
Prelim private sector PMI figures provided support, however, following particularly disappointing January numbers.
In February, the Services PMI rose from 39.5 to 49.7, with the Manufacturing PMI increasing from 54.1 to 54.9. As a result, the composite PMI increased from 41.2 to 49.8 in February, according to prelim figures.
Extended lockdown measures that have no end in sight remained a drag on the services sector mid-way through the 1st quarter.
In the week, the Pound gained 1.21% to end the week at $1.4016. In the week prior, the Pound had risen by 0.83% to $1.3849.
The FTSE100 ended the week up by 0.52%, following a 1.55% gain from the previous week.
Out of the Eurozone
It was also relatively busy week on the economic data front.
Through the 1st half of the week, economic data for Germany and the Eurozone were in focus.
The stats were skewed to the positive, providing EUR support ahead of a Friday data dump.
For the Eurozone, the trade surplus widened from €25.8bn to €29.2bn reflecting improving trade terms.
Economic sentiment figures for February also delivered support. Germany’s ZEW Economic Sentiment index rose from 61.8 to 71.2, with the Eurozone’s rising from 58.3 to 69.8.
2nd estimate GDP figures for the Eurozone were also EUR positive, with both the quarterly and annualized seeing upward revisions.
The only blemish early on in the week was a larger than expected fall in industrial production. Production fell by 1.6%, partially reversing a 2.5% rise from November.
In the 2nd half of the week, Eurozone consumer confidence waned in February, with the index falling from -13.8 to -14.8.
Vaccine woes and extended containment measures likely contributed to the demise.
At the end of the week, private sector PMI numbers for February were in focus.
According to the prelim survey, the French Manufacturing PMI jumped from 51.6 to a 3-year high 55.0 in February. Economists had forecast a decline to 51.4.
The services PMI fell from 47.3 to a 3-month low 43.6, which was worse than a forecasted decline to 47.0.
German manufacturing sector activity also picked up in February, with the prelim Manufacturing PMI rising from 57.1 to a 36-month high 60.6. Economists had forecasted a fall to 56.5.
Service sector troubles continued, however, with the services PMI falling from 46.7 to a 9-month low 45,9. Economists had forecast a decline to 46.5.
For the Eurozone, the Manufacturing PMI increased from 54.8 to 57.7, while the services PMI fell from 45.4 to 44.7.
In spite of the fall in the services PMI, the composite PMI rose from 47.9 to 48.1, supported by the manufacturing sector.
On the monetary policy front, the ECB meeting minutes had a cautiously optimistic tone, supporting the EUR. Members did note that risks remained titled to the downside, with EUR strength a possible concern.
For the week, the EUR slipped by 0.01 % to $1.2119. In the week prior, the EUR had risen by 0.61% to $1.2120.
For the European major indexes, it was another mixed week, following the previous week’s mixed results. The CAC40 and the EuroStoxx600 rose by 1.23% and by 0.21% respectively, while the fell by 0.40%,
For the Loonie
It was a relatively quiet week. Economic data included inflation figures for January and retail sales figures for December.
In January, inflationary pressures picked up, with the annual core rate of inflation accelerating from 1.5% to 1.6%.
Month-on-month, core consumer prices rose by 0.5%, reversing a 0.4% decline from December. Consumer prices rose by 0.6% in the month.
At the end of the week, retail sales disappointed, however.
In December, core retail sales slid by 4.1%, reversing a 2.1% jump in November. Retail sales fell by 3.4%, reversing a 1.3% rise in November.
While the stats were mixed in the week, the Loonie found support on a continued rise in crude oil prices.
In the week ending 19th February, the Loonie rose by 0.64% to C$1.2615. In the week prior, the Loonie had increased by 0.47% to C$1.2696.
In the week ending 19th February, the Aussie Dollar rallied by 1.39% to $0.7869, with the Kiwi Dollar ended the week up by 1.05% to $0.7299.
For the Aussie Dollar
It was a relatively quiet week.
Key stats included January employment and retail sales figures.
It was a mixed set of numbers for the Aussie Dollar.
While employment rose by a modest 29.1k in January, full employment jumped by 59.0k.
The pickup in full employment supported a fall in the unemployment rate from 6.6% to 6.4%. Some of this was as a result of a fall in the participation rate from 66.2% to 66.1%, however.
At the end of the week, retail sales rose by 0.6%, according to prelim figures. The rise was modest, however, following a 4.2% slide in December.
All in all, the numbers were good enough to deliver the upside for the week.
On the monetary policy front, the RBA meeting minutes were also in focus early in the week. There were no major surprises, however, following the RBA’s surprise move earlier in the month.
For the Kiwi Dollar
It was a particularly quiet week.
4th quarter wholesale inflation figures were in focus on Friday. The producer input price index ended the 4th quarter flat, pinning the Kiwi Dollar back early in the final session.
It wasn’t enough to leave the Kiwi in the red for the week, however. A 1.08% rally on Friday delivered the upside for the week.
For the Japanese Yen
It was a busy week.
In the 1st half of the week, 4th quarter GDP numbers were in focus. The Japanese economy grew by more than anticipated in the quarter.
Year-on-year, the economy expanded by 12.7%, with the economy growing by 3% in the quarter. Growth did moderate from the 3rd quarter, however, which was to be expected.
Mid-week, trade figures disappointed, with Japan’s trade balance sliding from a ¥749.6bn surplus to a ¥323.9bn deficit.
At the end of the week, it was a mixed bag on the economic data front.
Deflationary pressures eased in January, albetit modestly, with Japan’s manufacturing sector returning to expansion.
COVID-19 containment measures continued to hit the services sector, however, which contracted at a more marked pace in February.
The Japanese Yen fell by 0.49% to ¥105.45 against the U.S Dollar. In the week prior, the Yen had risen by 0.43% to ¥104.94.
Out of China
It was a particularly quiet week on the data front. There were no stats with the China markets closed until Thursday’s reopening.
In the week ending 19th February, the Chinese Yuan rose by 0.01% to CNY6.4577. In the week prior, the Yuan had risen by 0.12% to CNY6.4582.
The CSI300 fell by 0.50%, while the Hang Seng ended the week up by 1.56%.