It was a busier week on the economic calendar, in the week ending 17th September.
A total of 61 stats were monitored, which was up from 42 stats in the week prior.
Of the 61 stats, 21 came in ahead forecasts, with 27 economic indicators coming up short of forecasts. There were 13 stats that were in line with forecasts in the week.
Looking at the numbers, 29 of the stats reflected an upward trend from previous figures. Of the remaining 32 stats, 30 reflected a deterioration from previous.
For the Greenback, upbeat economic data and sentiment towards monetary policy delivered support in the week. In the week ending 17th September, the Dollar Spot Index rose by 0.66% to 93.195. In the previous week, the Dollar had risen by 0.59% to 92.582.
Out of the U.S
Early in the week, inflation figures were in focus.
In August, the annual rate of core inflation softened from 4.3% to 4.0% versus a forecasted 4.2%. While softer than expected, 4% continued to sit well above the FED’s 2% target, leaving tapering on the table.
Mid-week, industrial production and NY Empire State manufacturing figures were market positive.
On Thursday, retail sales, Philly FED Manufacturing PMI, and jobless claims figures were of greater interest, however.
In August, retail sales increased by 0.7% versus a forecasted 0.2% decline. Core retail sales jumped by 1.8% versus a 0.1% decline. In July retail sales had fallen by 1.1% and core retail sales by 0.4%.
Manufacturing numbers were also upbeat, with the Philly FED Manufacturing PMI increasing from 19.4 to 30.7 in September.
Jobless claims figures failed to impress, however, with sub-300k remaining elusive. In the week ending 10th September, initial jobless claims rose from 312k to 332k. Economists had forecast an increase to 330k.
At the end of the week, consumer sentiment improved, albeit moderately. In September, the Michigan Consumer Sentiment Index rose from 70.3 to 71.0, falling short of a forecasted 72.0.
Out of the UK
It was also a busy week. Employment, inflation, and retail sales figures were in focus. The stats were skewed to the positive.
In August, claimant counts fell by a further 58.6k after having fallen by 48.9k in July. In July, the unemployment rate fell from 4.7% to 4.6%.
The UK’s annual rate of inflation accelerated from 2.0% to 3.25 in August, also delivering Pound support.
At the end of the week, retail sales disappointed, however. Month-on-month, core retail sales fell by 1.2% in August, following a 3.2% slide in July. Retail sales fell by 0.9% after having fallen by 2.8% in July. Economists had forecast a pickup in spending.
In the week, the Pound fell by 0.71% to end the week at $1.3741. In the week prior, the Pound had fallen by 0.23% to $1.3839.
The FTSE100 ended the week down by 0.93%, following a 1.53% loss from the previous week.
Out of the Eurozone
Economic data included wage growth, industrial production, trade, and finalized inflation figures for the Eurozone.
Finalized inflation figures for Spain, France, and Italy were also out but had a muted impact on the EUR.
In the 2nd quarter, wage fell by 0.4%, year-on-year, partially reversing a 2.1% increase recorded in the previous quarter.
Industrial production and trade data were positive, however.
Production increased by 1.5%, reversing a 0.1% fall from June, with the Eurozone’s trade surplus widening from €17.7bn to €20.7bn.
At the end of the week, finalized inflation figures for the Eurozone were in line with prelim figures. The Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0% in August.
For the week, the EUR fell by 0.75% to $1.1725. In the week prior, the EUR had fallen by 0.56% to $1.1814.
The CAC40 slid by 1.40%, with the DAX30 and the EuroStoxx600 ending the week with losses of 0.77% and 0.96% respectively.
For the Loonie
Economic data included manufacturing sales, inflation, and wholesale sales figures.
The stats were mixed in the week.
In July, both manufacturing sales and wholesale sales disappointed with falls of 1.5% and 2.1% respectively.
Providing support, however, was a pickup in the annual rate of inflation from 3.3% to 3.5%.
The pickup in inflationary pressure and rising oil prices were not enough to support the Loonie against the Greenback.
In the week ending 17th September, the Loonie fell by 0.57% to C$1.2764. In the week prior, the Loonie had fallen by 1.34% to C$1.2692.
It was another bearish week for the Aussie Dollar and the Kiwi Dollar.
The Aussie Dollar fell by 1.05% to $0.7279, with the Kiwi Dollar ending the week down by 1.03% to $0.7040.
For the Aussie Dollar
Business and consumer confidence figures were in focus in the 1st half of the week.
In spite of the latest lockdown measures, the stats were skewed to the positive.
The NAB Business Confidence Index rose from -8 to -5 in August.
More significantly, the Westpac Consumer Sentiment Index increased by 2.0% in September. The index had fallen by 4.4% in August.
On Thursday, employment figures disappointed, however.
In August, full employment fell by 68k following a 4.2k decline in July. Employment tumbled by 146.3k, however, versus a forecasted 90.0k decline. In July, employment had risen by 2.2k.
According to the ABS,
- The unemployment rate fell from 4.6% to 4.5%, with the participation rate declining from 66.0% to 65.2%.
- Year-on-year, the number of unemployed was down by 298,000.
For the Kiwi Dollar
It was also a mixed week on the economic data front.
2nd quarter GDP numbers impressed, with the NZ economy expanding by 2.8%, quarter-on-quarter. The economy had expanded by a more modest 1.4% in the previous quarter.
On the negative, however, was a slide in the Business PMI from 62.6 to 40.1 in August. The figures reflected the impact of the latest lockdown measures on production, justifying the RBNZ’s decision to leave the cash rate unchanged.
For the Japanese Yen
It was a relatively quiet week, with the numbers skewed to the negative.
According to finalized figures, industrial production fell by 1.5% in July. While in line with prelim figures, this was a partial reversal of a 6.5% jump from June.
In August, Japan’s trade balance fell from a ¥439.4bn surplus to a ¥635.4bn deficit. Exports rose by 26.2%, year-on-year, after having been up by 37% in July.
The Japanese Yen rose by 0.01% to ¥109.93 against the U.S Dollar. In the week prior, the Yen had fallen by 0.21% to ¥109.94.
Out of China
Fixed asset investment and industrial production figures were in focus mid-week.
There were yet more disappointing numbers from China for the markets to consider.
In August, fixed asset investment increased by 8.9%, year-on-year. This was softer than a 10.3% increase in July.
More significantly, industrial production was up by 5.3% in August versus 6.4% in July.
In the week ending 17th September, the Chinese Yuan fell by 0.34% to CNY6.4661. In the week prior, the Yuan had ended the week up by 0.18% to CNY6.4443.
The CSI300 and the Hang Seng ended the week down by 3.14% and by 4.90% respectively.