AUDUSD (0.752): The Aussie dollar weakened considerably this week on account of risk aversion which saw the commodity risk currencies weaken across the board. At the time of writing AUDUSD was down -1.69% for the week after prices briefly posted highs above 0.77255, to trade lower below 0.7536. From a a macro perspective, economic data from Australia was largely mixed. Home sales fell -2.3% for the month while commodity prices declined -17.9% from -20.8% previously. Retail sales also declined for the month, rising at a slower pace of 0.3%. The only positive data was the building approvals which continued to rise steadily, posting 2.4% growth for the month.
- HIA new home sales m/m -2.3% vs. 0.6% previously
- Private sector credit m/m 0.5% vs. 0.5%
- AIG Manufacturing index 44.2 vs. 52.3
- Building approvals m/m 2.4% vs. 1.2%
- Commodity prices y/y -17.9% vs. -20.8%
- Trade balance -2.75bn vs. -2.21bn
- Retail sales 0.3% vs. 0.5%
EURUSD (1.109): The Euro, single currency was volatile this week as the currency gapped down lower after last week, Alexis Tsipras, the Greek premier announced a referendum to let the voters decide on the bailout terms. The Euro however recovered the losses and filled the gap posting a weekly high above 1.1263 but failed miserably. The currency however has been trading sideways ahead of the Greek referendum due this Sunday. It is hard to expect how the Euro will react to the news as low volatility on Monday’s opening Asian trading session is likely to see widening spreads and gaps being formed. Economic data was largely shrugged off by the Euro this week. Flash inflation readings met estimates and were largely unchanged.
- German Preliminary CPI m/m -0.1% vs. 0.1%
- Spain Flash CPI y/y 0.1% vs. -0.1%
- German retail sales m/m 0.5% vs. 0.0%
- France consumer spending m/m 0.1% vs. 0.3%
- Italy unemployment rate 12/4% vs. 12.5%
- Eurozone CPI flash estimate y/y 0.2% vs. 0.2%
- Eurozone Core CPI flash estimate y/y 0.8% vs. 0.8%
- Italy Preliminary CPI m/m 0.1% vs. 0.3%
- Eurozone final manufacturing PMI 52.5 vs. 52.5
- Eurozone PPI m/m 0.0% vs. 0.1%
- Eurozone final services PMI 54.5 vs. 54.4
- Eurozone retail sales m/m 0.2% vs. 0.1%
NZDUSD (0.669): The Kiwi continued to post losses this week as well, losing 2% for the week at the time of writing. The Kiwi briefly touched weekly highs above 0.6876 before declining to hit weekly lows of 0.669. Economic data from New Zealand continued to disappoint with building consents staying flat for the month. Business confidence also took a hit posting 2.3 reading. The Global dairy trade index was also weaker at -5.9%, down from -1.3% previously. The Kiwi continues to remain bearish with rising bets of further rate cuts from the RBNZ in the coming months.
- Building consents m/m 0.0% vs. -0.9% previously
- ANZ Business confidence -2.3 vs. 15.7 previously
- GDT Price Index -5.9% vs. -1.3%
- ANZ commodity prices m/m -3.1% vs. -4.9%
USDJPY (122.9): The Yen was bid up early this week on account of the uncertainty from Greece, which saw the USDJPY decline to weekly lows below 122.1. Later in the week the strength in the Greenback managed to see a small rally in the USDJPY currency pair which saw the Yen weaken to 123.5. USDJPY currently is trading sideways and is likely to keep this ranging price action into the market close. Retail sales saw a robust jump, rising 3% and beating estimates of 2.1%. However housing starts and industrial production grew at a weaker pace than expected.
- Retail sales y/y 3% vs. 2.1%
- Prelim industrial production m/m -2.2% vs. -0.8%
- Average cash earnings y/y 0.6% vs. 0.7%
- Housing starts y/y 5.8% vs. 6.2%
- Tankan manufacturing index 15 vs. 12; non-manufacturing index 23 vs. 23
- Final manufacturing PMI 34.2% vs. 36.2%
USDCAD (1.256): The Canadian Dollar weakened considerably this week as the USDCAD posted weekly highs to 1.2619 gaining 2% for the week. There was not much of economic data from Canada with the exception of the monthly GDP which fell -0.1%. The Loonie was clearly tracking oil prices which also turned weaker this week as US stockpiles indicated a buildup in inventory and a largely stronger Greenback.
- RMPI m/m 4.4% vs. 4.4%
- IPPI m/m 0.5% vs. 0.4%
- GDP m/m -0.1% vs. 0.1%
GBPUSD (1.5625): The British Pound was largely trading sideways after the currency failed to break above weekly highs of 1.578. The Cable lost -0.76% for the week. The weakness set in after comments from BoE Governor Mark Carney’s dovish talk on interest rate hikes. Last week saw the final revision to the first quarter GDP which stabilized at 0.4% for the quarter. PMI’s were largely mixed but positive. The Pound Sterling however failed to rally on the back of better economic data.
- Mortgage approvals 64k vs. 69k
- Gfk consumer confidence 7 vs. 2
- Final GDP q/q 0.4% vs. 0.4%
- Index of services 3m/3m 0.5% vs. 0.5%
- Revised business investment q/q 2% vs. 1.8%
- Manufacturing PMI 51.4 vs. 52.6
- Nationwide HPI m/m -0.2% vs. 0.6%
- Construction PMI 58.1 vs. 56.6
- Services PMI 58.5 vs. 57.4
USDCHF (0.942): The Swiss Franc continued its weakness this week after the safe haven was initial bid up early in the week. SNB Chief, Thomas Jordan reported that the SNB was intervening in the currency markets, which saw the USDCHF reverse from weekly lows of 0.9253 to gain 0.9% for the week, posting highs above 0.9495. Economic data from Switzerland was limited to the KOF economic barometer and the manufacturing PMI which were soft.
- KOF Economic barometer 89.7 vs. 93.7
- Manufacturing PMI 50 vs. 50
US Dollar Index (96.19): The US Dollar index was weaker on Monday but managed to find support as the SNB intervened in the markets. The index hit weekly lows to 95 before reversing its losses to trade near 96.1. Economic data from the US included the ISM manufacturing data which beat estimates, rising 53.5 while ISM manufacturing prices fell to 49.5 below estimates of 51.1. The main event was however Thursday’s nonfarm payroll data which was soft as the US economy added 223k new jobs against estimates of 231k. Last month’s numbers were also revised lower but the unemployment rate got a boost, ticking lower to 5.3%, below estimates of 5.4%. However, for the most part, the improvement in unemployment rate was due to a reduction in the labour force. Average earnings index remained flat for the month. Overall the June jobs report was a mixed bag offering no shift to expectations for a September rate hike. US markets are closed today on account of the bank holiday.
- Pending home sales m/m 0.9% vs. 1.3%
- Chicago PMI 49.4 vs. 50.2
- CB Consumer confidence 101.4 vss. 97.1
- ADP nonfarm employment change 237k vs. 219k
- Final manufacturing PMI 53.6 vs. 53.4
- ISM Manufacturing PMI 53.5 vs. 53.2
- Construction spending m/m 0.8% vs. 0.4%
- ISM Manufacturing prices 49.5 vs. 51.1
- Nonfarm payroll change 223k vs. 231k
- Unemployment rate 5.3% vs. 5.4%
- Average hourly earnings m/m 0.0% vs. 0.2%
- Weekly unemployment claims 281k vs. 270k