It was a busy week on the economic calendar, in the week ending 21st May.
A total of 69 stats were monitored, following 49 stats from the week prior.
Of the 69 stats, 35 came in ahead forecasts, with 26 economic indicators coming up short of forecasts. There were 8 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 40 stats, 33 reflected a deterioration from previous.
For the Greenback, economic data from the U.S and FOMC talk of a review of the asset purchasing program provided some Dollar support. In the week ending 21st May, the Dollar Spot Index fell by 0.34% to 90.017. In the previous week, the Dollar had risen by 0.08% to 90.304.
Out of the U.S
It was a quieter week on the economic data front.
Key stats included manufacturing numbers for NY State and Philly, the weekly jobless claim figures, and prelim private sector PMIs.
It was a mixed set of numbers for the Greenback and the broader market.
Manufacturing sector activity saw slower growth in May, with both the NY Empire State Manufacturing Index and Philly Manufacturing Index declining.
The modest falls were not enough to spook the markets, however.
On Thursday, the weekly jobless claim figures did draw plenty of interest, supporting riskier assets.
In the week ending 14th May, initial jobless claims fell from 478k to 444k.
At the end of the week, prelim private sector PMIs for May were in focus.
The services PMI jumped from 64.7 to 70.1, with the manufacturing PMI rising from 60.5 to 61.5. Economists had forecast PMIs of 64.5 and 60.2 respectively.
Other stats in the week included housing sector data that had a muted impact on the Dollar and the broader markets.
While the stats drew plenty of attention, the FOMC meeting minutes out mid-week were key.
The minutes revealed chatter amongst member of a need to review monetary policy amidst the sharp economic rebound. Asset purchases, in particular, were highlighted, contradicting FED Chair Powell’s assurances that asset purchases would remain unchanged. The markets had previously got jittery over a possible tapering to the asset purchasing program…
In the equity markets, the Dow fell by 0.51%, with the NASDAQ and the S&P500 seeing losses of 0.31% and 0.43% respectively.
Out of the UK
It was a busy week.
In the 1st half of the week, employment and inflation figures were in focus.
The stats were skewed to the positive, delivering support for the Pound.
In March, the unemployment rate fell from 4.9% to 4.8%, with employment jumping by 84k in the 1st quarter.
Claimant counts fell by 15.1k in April, following a 19.4k decline in March, which was also positive.
Mid-week, inflation figures also delivered the Pound with a boost.
In April, the annual rate of inflation accelerated from 0.7% to 1.5%, with consumer prices rising by 0.6% month-on-month. In March, consumer prices had risen by 0.3%.
Through the 2nd half of the week, April retail sales and prelim private sector PMIs for May were in focus.
Retail sales jumped by 9.2% in the month of April, with core retail sales up by 9.0%. Year-on-year, core retail sales was up 37.7%, with retail sales up by 42.4%.
From the private sector, the manufacturing PMI jumped from 60.9 to 66.1, with the services PMI rising from 61.0 to 61.8. Economists had forecast PMIs of 60.5 and 62.0 respectively.
Following a hawkish BoE, the latest stats coupled with the UK’s reopening point to further upside for the Pound.
In the week, the Pound rose by 0.38% to end the week at $1.4150. In the week prior, the Pound had risen by 0.81% to $1.4097.
The FTSE100 ended the week down by 0.36%, following a 1.21% decline from the previous week.
Out of the Eurozone
Early in the week, the economic indicators for the Eurozone were in focus.
2nd estimate GDP numbers for the 1st quarter were in line with prelim figures providing the EUR with little direction.
Trade data disappointed, however, with the Eurozone’s trade surplus narrowing from €17.7bn to €15.8bn. The narrowing was as a result of a sharp increase in imports, however. Exports rose by 8.9% when compared with March 2020.
At the end of the week, it was prelim private sector PMI figures for May that were key.
According to prelim figures, the French manufacturing PMI rose from 58.9 to 59.2, with the services PMI rising from 50.3 to 56.6.
Germany’s manufacturing PMI fell from 66.2 to 64.0 while the services PMI increased from 49.9 to 52.8.
For the Eurozone
In May, the manufacturing PMI slipped from 62.9 to 62.8, while the services PMI increased from 50.5 to a 35-month high 55.1. Economists had forecast PMIs of 62.5 and 52.3 respectively.
Supported by the pickup in service sector activity, the composite PMI increased from 53.8 to a 39-month high 56.9. Economists had forecast an increase to 55.1.
According to the Markit survey,
- The rate of expansion across the private sector hit the highest for over 3-years.
- New order inflows surged at a pace not seen for almost 15-years.
- Business optimism continued to hit new highs.
- Price gauges rose further, however, as demand continued to outstrip supply for many goods and services.
For the week, the EUR rose by 0.34% to $1.2182. In the week prior, the EUR had fallen by 0.21% to $1.2141.
The EuroStoxx600 rose by 0.43%, with CAC40 and the DAX30 ending the week up by 0.02% and by 0.14% respectively.
For the Loonie
It was a relatively quiet week.
Inflation and retail sales figures were in focus through the 2nd half of the week.
The stats were skewed to the positive.
Aligned with other economies, there was a marked pickup in inflationary pressures in April.
The annual rate of core inflation accelerated from 1.4% to 2.3%, with core consumer prices rising by 0.5% in the month. In March, core consumer prices had risen by 0.3%.
Month-on-month, consumer prices also rose by 0.5%, following a 0.5% increase in March.
Retail sales rose by a further 3.6% in March, following a 4.8% jump in February. Core retail sales increased by a more impressive 4.3%, month-on-month. Core retail sales had also risen by 4.8% in February.
In the week ending 21st May, the Loonie rose by 0.31% to C$1.2066. In the week prior, the Loonie had risen by 0.24 % to C$1.2104.
It was another bearish week for the Aussie Dollar and the Kiwi Dollar.
In the week ending 21st May, the Aussie Dollar fell by 0.50% to $0.0.7732, with the Kiwi Dollar ending the week down by 1.05% to $0.71724.
For the Aussie Dollar
It was a busy week.
Economic data included consumer confidence and wage growth figures along with employment and retail sales numbers.
It was a mixed week, with consumer sentiment taking a hit in May, while wages grew by a further 0.6% in the 1st quarter.
On the employment front, a fall in the participation rate led to a fall in the unemployment rate from 5.6% to 5.5%.
While employment fell by 30.6k in April, full employment rose by 33.8, which was Aussie Dollar positive.
At the end of the week, prelim retail sales failed to support the Aussie Dollar, with sales up 1.1% in April. In March, retail sales had risen by 1.3%.
On the monetary policy front, the RBA meeting minutes kept the Aussie Dollar pegged back early in the week. With the board envisaging a hold on cash rates until 2024 at the earliest, there was little for the markets to take other than optimism towards the continued economic recovery.
For the Kiwi Dollar
It was a particularly quiet week.
Wholesale inflation figures for the 1st quarter failed to give the Kiwi a boost despite a pickup in wholesale inflationary pressure.
In Q1, the producer input price index rose by 1.2%, following a 0.6% increase in the 4th quarter of last year.
With the markets expecting a marked pickup in inflationary pressures, however, there was little support for the Kiwi.
For the Japanese Yen
It was a busier week.
Early in the week, 1st quarter GDP numbers were in focus.
The Japanese economy contracted by 1.30% in the quarter, which was marginally worse than a forecasted 1.20% contraction. Year-on-year, the economy contracted by 5.1%. In the 4th quarter, the economy had expanded by 2.8%, quarter-on-quarter, and by 11.6% year-on-year.
Trade figures were upbeat in spite of a narrowing of the trade surplus, with exports jumping by 38% in April. In March, exports had risen by 16.1%.
At the end of the week, prelim private sector PMI numbers for May were disappointing, however.
The manufacturing PMI slipped from 53.6 to 52.5, with the services PMI sliding from 49.5 to 45.7. Firms attributed a renewed surge in new COVID-19 cases to the deterioration in private sector conditions.
Other stats in the week included finalized industrial production and inflation figures that had a muted impact on the Yen.
The Japanese Yen rose by 0.36% to ¥108.96 against the U.S Dollar. In the week prior, the Yen had fallen by 0.69% to ¥109.35.
Out of China
It was a relatively busy week on the data front.
Fixed asset investment, industrial production, and retail sales figures set the tone at the start of the week.
The stats were skewed to the negative, testing support for riskier assets on Monday.
Year-on-year, industrial production increased by 9.8% in April, which was down from 14.1% in March. Retail sales was up by 17.7%, which was down from 34.2% in March.
Compared with April 2020, fixed asset investment was up by 19.9%. Fixed asset investment had been up by 25.6% in March.
In the week ending 21st May, the Chinese Yuan slipped by 0.05% to CNY6.4340. In the week prior, the Yuan had fallen by 0.06% to CNY6.4332.
The CSI300 rose by 0.46%, with the Hang Seng ending the week up by 1.54%.