It was a busier week on the economic calendar, in the week ending 18th June.
A total of 61 stats were monitored, which was up from 45 stats in the week prior.
Of the 61 stats, 25 came in ahead forecasts, with 26 economic indicators coming up short of forecasts. There were 10 stats that were in line with forecasts in the week.
Looking at the numbers, 26 of the stats reflected an upward trend from previous figures. Of the remaining 35 stats, 26 reflected a deterioration from previous.
For the Greenback, the FOMC policy decision and projections were the key drivers. In the week ending 18th June, the Dollar Spot Index rallied by 2.32% to 92.225. In the previous week, the Dollar had risen by 0.46% to 90.5550.
Out of the U.S
It was a busy start to the week.
Retail sales and wholesale inflation figures drew plenty of attention on Tuesday.
It was a mixed set of numbers, however.
While wholesale inflationary pressures picked up in May, retail sales hit reverse in May.
Industrial production and NY Empire State manufacturing numbers also delivered mixed results on the day.
While industrial production rose further in May, the NY Empire State Manufacturing Index fell from 24.3 to 17.4 in June.
In the 2nd half of the week, jobless claims and Philly FED Manufacturing PMI numbers were in focus.
In June, the Philly FED Manufacturing PMI fell from 31.5 to 30.7 versus a forecasted 31.0.
While the headline index declined, the employment sub-index was on the rise. The sub-index increased from 19.3 to 30.7.
Jobless claims figures disappointed, however.
In the week ending 11th June, initial jobless claims rose from 375k to 412k. Economists had forecast a decline to 359k.
While the stats did draw attention, the FOMC monetary policy decision, press conference, and economic projections were the key drivers in the week.
A more hawkish than expected outlook on the economy and interest rates led to a Dollar rally.
In the equity markets, the NASDAQ slipped by 0.28%, with the Dow and the S&P500 saw falling by 3.45 % and by 1.91% respectively.
Out of the UK
It was a busier week, with employment, inflation, and retail sales in focus.
The stats were skewed to the positive mid-week.
In April, the unemployment rate slipped from 4.8% to 4.7%, with claimant counts falling by 92.6k in May. In April, claimant counts had fallen by 55.8k.
On Wednesday, inflation figures also pointed to a pickup in inflationary pressures. The UK’s annual rate of inflation accelerated from 1.5% to 2.1%, taking inflation beyond the BoE’s objective.
At the end of the week, retail sales figures disappointed, however, ahead of the coming week’s BoE monetary policy decision.
In May, retail sales fell by 1.4%, with core retail sales sliding by 2.1%. Economist had forecast increases of 1.6% and 1.5% respectively.
Adding further downward pressure on the Pound was a continued rise in the Delta variant of the coronavirus.
In the week, the Pound slid by 2.45% to end the week at $1.3810. In the week prior, the Pound had fallen by 0.35% to $1.4107.
The FTSE100 ended the week down by 1.63%, reversing a 0.92% rise from the previous week.
Out of the Eurozone
It was a quieter week.
Industrial production, trade data, and wage growth figures for the Eurozone were in focus.
It was a mixed set of numbers for the EUR.
While industrial production rose by more than expected in April, the Eurozone’s trade surplus narrowed markedly, with wage growth also slowing significantly in the 1st quarter.
The stats had a relatively muted impact on the EUR, however, with the markets focused on the FED in the week.
Late in the week, finalized inflation and wholesale inflation figures for the Eurozone and Germany also failed to materially move the dial.
In May, the annual rate of inflation accelerated from 1.6% to 2.0%, which was in line with prelim numbers. Consumer prices increased by 0.3% in the month of May, which was also in line with prelim figures. In April, consumer prices had risen by 0.6%.
In Germany, the annual rate of wholesale inflation jumped from 5.2% to 7.2% in May. Month-on-month, the producer price index rose by 1.5%, following a 0.8% increase in April.
For the week, the EUR slid by 2.50% to $1.1863. In the week prior, the EUR had fallen by 0.48% to $1.2108.
The CAC40 ended the week down by 0.48%, with the DAX30 and the EuroStoxx600 falling by 1.56% and by 1.19% respectively.
For the Loonie
It was a quiet week. Manufacturing sales figures for April disappointed on Monday. Sales fell by 2.1%, partially reversing a 3.5% jump from March.
Mid-week, inflation figures were skewed to the positive, however. Canada’s annual core rate of inflation accelerated from 2.3% to 2.8% in May.
In the month of May, both core consumer prices and consumer prices were also on the rise.
Other stats in the week included housing sector data and wholesale sales figures that had a muted impact on the Loonie.
In the week ending 18th June, the Loonie slumped by 3.15% to C$1.2465. In the week prior, the Loonie had fallen by 0.61% to C$1.2158.
It was a particularly bearish week for the Aussie Dollar and the Kiwi Dollar.
In the week ending 18th June, the Aussie Dollar tumbled by 3.36% to $0.7479, with the Kiwi Dollar sliding by 3.85% to $0.6936.
For the Aussie Dollar
It was a quiet week. Employment figures for May were the key stats of the week.
The numbers were positive, with full employment jumping by 97.5k in May, supporting a 115.2k rise in employment.
In spite of a 0.3 percentage point increase in the participation rate, the unemployment rate fell from 5.5% to 5.1%.
While the stats were skewed to the positive, the RBA meeting minutes from Tuesday pressured the Aussie.
The Board stood by its outlook on monetary policy and a likely hold cash rates until 2024 at the earliest.
Following the FOMC’s hawkish outlook on monetary policy, monetary policy divergence sank the Aussie.
For the Kiwi Dollar
It was a relatively quiet week.
GDP numbers for the 1st quarter provided the Kiwi Dollar with much-needed support at the end of the week.
In the 1st quarter, New Zealands’s economy expanded by 1.6%, recovering from a 1.0% contraction from the 4th quarter of last year. Economists had forecast more modest growth of just 0.5%.
The stats were not enough to shift sentiment towards RBNZ monetary policy, however.
For the Japanese Yen
It was a busier week.
Early in the week, finalized industrial production figures for April impressed. In April, industrial production increased by 2.9%, coming in ahead of a prelim 2.5%. Production had rise by 1.7% in March.
Mid-week, trade data failed to meet forecasts, however.
Exports were up by 49.6% in May, year-on-year, falling short of a forecasted 51.3% jump.
Japan’s trade balance slid from a ¥253.1bn surplus to a ¥187.1bn deficit.
In spite of the fall Japan’s trade balance into a deficit, there were marked increases in exports to the U.S, China, and to Western Europe.
At the end of the week, inflation figures for May failed to move the dial. This was in spite of a pickup in inflationary pressure. The annual rate of core inflation accelerated from -0.1% to 0.1% in May.
On the monetary policy front, the BoJ was also in action at the end of the week. There were no major surprises, however.
The Japanese Yen fell by 0.63% to ¥110.210 against the U.S Dollar. In the week prior, the Yen had fallen by 0.13% to ¥109.66.
Out of China
Industrial production, fixed asset investment, and retail sales figures for May were in focus mid-week.
Once more the stats were skewed to the negative, with weaker year-on-year growth than forecasted and than seen in the month prior.
Industrial production was up by 8.8 in May, which was down from a 9.8% increase in April.
Retail sales was up 12.4%, which was down from 17.7% in April, with fixed asset investments up 15.4%. Fixed asset investments had been up by 19.9% year-on-year in April.
In the week ending 18th June, the Chinese Yuan fell by 0.90% to CNY6.4531. In the week prior, the Yuan had fallen by 0.05% to CNY6.3988.
The CSI300 and the Hang Seng ended the week down by 2.34% and by 0.14% respectively.