AUDUSD (0.73): The Australian dollar is up 1.58% for the week with prices briefly posting a 5-week high above 0.7349 during the week. Economic data during the week was largely in the positive with the quarterly GDP beating estimates to rise 0.9%, while retail sales increased 0.5%. The RBA left interest rates unchanged at 2.0% in a widely expected move and struck a neutral tone in the markets. While the manufacturing and services index were mixed, the Australian economy is at least poised towards a recovery in the near term with interest rates expected to stay put at 2.0%.
- Private sector credit m/m 0.7% vs. 0.6%; y/y 6.7% vs. 6.6%
- AiG Manufacturing 52.5 vs. 50.2 previously
- Building approvals m/m 3.9% vs. -2.5%; y/y 12.3% vs. 5.7%
- RBA leaves interest rates unchanged at 2.0%
- GDP q/q 0.9% vs. 0.8%; y/y 2.5% vs. 2.4%
- AiG Services 48.2 vs. 48.9
- Trade balance -3.350Mn vs. -2.6Mn
- Retail sales m/m 0.5% vs. 0.4%
EURUSD (1.09): The Euro gained a solid 2.9% for the week posting a 3-week high above 1.093 after the ECB fell short of market expectations. While the European Central Bank cut the deposit rates strongly and expanded the QE timeline from the current September 2016 to March 2017, failure to announce additional stimulus expansion saw the Euro reverse strongly on the news. Data this week from Eurozone saw various services and manufacturing PMI’s which broadly came out in the positive, however inflation remained subdued with both the headline and the core CPI in the Eurozone falling short of expectations. ECB Chief, Mario Draghi is expected to speak later this evening at an event in New York.
- German retail sales m/m -0.4% vs. 0.2%; y/y 2.1% vs. 2.8%
- Spain retail sales adjusted y/y 5.8% vs. 4.3%
- German CPI m/m 0.1% vs. 0.1%; y/y 0.4% vs. 0.4%
- Spain manufacturing PMI 53.1 vs. 51.7
- France manufacturing PMI 50.6 vs. 50.8
- Germany manufacturing PMI 52.9 vs. 52.6
- Eurozone manufacturing PMI 52.8 vs. 52.8
- Eurozone unemployment rate 10.7% vs. 10.8%
- Eurozone CPI y/y 0.1% vs. 0.2%; core CPI y/y 0.9% vs. 1.1%
- Eurozone PPI m/m -0.3% vs. -0.4%; y/y -3.1% vs. -3.2%
- Eurozone services PMI 54.2 vs. 54.6
- Spain services PMI 56.7 vs. 56.4
- France services PMI 51.0 vs. 51.3
- Germany services PMI 55.6 vs. 55.6
- ECB leaves minimum bid rate unchanged at 0.05%
- ECB changes deposit rate from -0.10% to -0.30%
- ECB extends QE timeline from September 2016 to March 2017
- German factory orders m/m 1.8% vs. 1.2%; y/y -1.4% vs. -2.5%
- Spain industrial production y/y 4.0% vs. 4.1%
NZDUSD (0.66): The Kiwi is up 2.37% at the time of writing for the week with the currency attempting to break above a 4-week high near 0.67. The gains in the Kiwi came about largely on a weaker US Dollar and some better than expected fundamentals. New Zealand’s GDT price index rebounded, rising 3.6% after continuous declines in the past weeks, but broadly the economic data from New Zealand wasn’t anything major to take notice about.
- GDT Price Index 3.6% vs. -7.9% previously
- ANZ Business confidence 14.6 vs. 10.5 previously
- Overseas trade index q/q -3.7% vs. -2.5%
- ANZ Commodity prices m/m -5.6% vs. 7.1% previously
USDJPY (122.8): The Dollar Yen remains range bound, up 0.07% for the week. Prices attempted to break above the previous range high near 123.565 but soon eased back to test down to last week’s lows near 122.370. Data from Japan this week was largely limited to retail sales which managed to beat the estimates but housing starts posted strong declines. There were a few comments from BoJ officials which also added to a stronger Yen, as they spoke of the risks of further expanding the QE program.
- Housing starts y/y -2.5% vs. 2.5%
- Average cash earnings y/y 0.7% vs. 0.4%
- Industrial production m/m 1.4% vs. 1.8%; y/y -1.4% vs. -0.9%
- Retail sales m/m 1.1% vs. 0.2%; y/y 1.8% vs. 0.9%
- Manufacturing PMI 52.6 vs. 52.8 previously
USDCAD (1.33): The Canadian Dollar was flat this week with USDCAD currently down -0.11%. Prices saw multiple attempts to break above previous highs near 1.339 – 1.34 but failure to do so saw the USDCAD pushing lower to the weekly support near 1.3318. Data this week from Canada was mixed with a larger than expected current account deficit. The monthly GDP numbers were also weak, with the economy showing a contraction of -0.50% on a monthly basis while the Canadian annualized economic growth remained flat. Earlier today, the jobs report showed the unemployment rate ticking higher to 7.1%, after last month’s jobs reports surprised on account of election hiring. The employment change also fell a strong -35k below estimates of -10k.
- Current account -16.21bn vs. -15.1bn
- GDP m/m -0.5% vs. 0.0%; y/y 0.0% vs. 0.4%
- BoC leaves rates unchanged at 0.50%
- Employment change -35.7k vs. -10.0k
- Unemployment rate 7.1% vs. 7.0%
- International merchandise trade -2.76bn vs. -1.7bn
GBPUSD (1.51): The British Pound gained 0.55% for the week posting a short term recovery in the process after hitting new weekly lows below 1.4915. But prices soon stabilized back above the weekly high of 1.51. Economic data from the UK was mixed with manufacturing PMI falling below expectations at 52.7 while construction PMI was also weaker at 55.3. The weak set of PMI numbers came about after last month’s strong numbers, which added to the GBPUSD’s weakness.
- Mortgage approvals 69.6k vs. 69.9k
- M4 money supply m/m 0.6% vs. -1.0% previously
- Manufacturing PMI 52.7 vs. 53.6
- Construction PMI 55.3 vs. 58.5
- Services PMI 55.9 vs. 55.0
USDCHF (0.99): The Swiss France strengthened strongly this week with USDCHF trading down to 0.99 region. The strong declines came about on the ECB’s monetary policy decision and the subsequent weakness in the US Dollar. Economic data from Switzerland this week included a weak quarterly GDP and inflation which continues to stay in the negative. The continued strength in the Swiss Franc is likely to see the SNB act in the near term.
- KoF Swiss leading indicator 97.9 vs. 100.2
- GDP q/q 0.0% vs. 0.2%; y/y 0.8% vs. 0.8%
- Retail sales y/y -0.8% vs. 0.2% previously
- Manufacturing PMI 49.7 vs. 50.8
- CPI m/m -0.1% vs. 0.0%; y/y -1.4% vs. -1.3%
US Dollar Index (98): The US Dollar Index is posted for a strong weekly loss down -2.0% for the week. Prices briefly traded near the 100 level but the resistance held up leaving prices to break strongly lower to a 3-week low. Economic data from the US was largely positive, but the markets focused more on Yellen’s speeches this week who remained optimistic that the Fed would hike rates in December. Friday’s nonfarm payrolls were also strong, rising above estimates while the US unemployment rate remained steady at 5.0%, making it an almost certain bet that the Fed is poised for a rate hike in December.
- Chicago PMI 48.7 vs. 54.0
- Pending home sales m/m 0.2% vs. 1.5%
- Manufacturing PMI 52.8 vs. 52.6
- ISM Manufacturing 48.6 vs. 50.5
- Construction spending m/m 1.0% vs. 0.6%
- ADP Employment change 217k vs. 190k
- Fed Yellen speech
- Unit labor costs q/q 1.8% vs. 1.0%
- Nonfarm productivity y/y 2.2% vs. 2.2%
- Weekly jobless claims 269k vs. 269k
- PMI services 56.1 vs. 56.5
- ISM non-manufacturing 55.9 vs. 58.0
- Factory orders 1.5% vs. 1.4%
- Nonfarm payroll change 211k vs. 200k
- Unemployment rate 5.0% vs. 5.0%
- Average hourly earnings m/m 0.2% vs. 0.2%; y/y 2.3% vs. 2.3%
