AUDUSD (0.694): The Australian dollar continues to remain bearish and looks poised for another week of losses of near -3.0%. The RBA left interest rates unchanged and stuck a neutral tone but it didn’t help lift the Aussie much. Post RBA, the GDP data was released a day later which showed the Australian economy rising 0.2% for the quarter, posting one of the weakest quarterly rise in two years. Retail sales also disappointed, declining -0.1% for the month. The risk aversion sentiment combined with diverging economic data has led the Aussie to fall further against the Greenback.
- MI Inflation gauge m/m 0.1% vs. 0.2% previously
- HIA new home sales m/m -0.4% vs. 0.5% previously
- Building approvals m/m 4.2% vs. 2.9%
- RBA leaves cash rate unchanged
- Commodity prices y/y -20.9% vs. -19.1% previously
- GDP q/q 0.2% vs. 0.4%
- Retail sales m/m -0.1% vs. 0.4%
EURUSD (1.11): The Euro is down -0.60% for the week largely due to the dovish views from Mario Draghi. The ECB left its monetary policy unchanged but the GDP and inflation forecasts was revised sharply lower for 205 and 2016. Draghi also left the door open for expanding the QE beyond September 2016 which was seen as being very dovish. The Euro, which tested the highs of 1.133 this week, was seen trading at 1.11 at the time of writing.
- CPI Flash estimates y/y 0.2% vs. 0.2%; Core CPI y/y 1.0% vs. 1.0%
- Final manufacturing PMI 52.3 vs. 52.4
- Unemployment rate 10.9% vs. 11.1%
- PPI m/m -0.1% vs. -0.1%
- Final services PMI 54.4 vs. 54.3
- Retail sales m/m 0.4% vs. 0.6%
- ECB leaves minimum bid rate unchanged
- German factory orders m/m -1.4% vs. -0.5%
- Retail PMI 51.4 vs. 54.2
NZDUSD (0.633): The Kiwi saw a bearish weak with prices falling -2.0%. Data from New Zealand was mixed this week with building consents rising 20.4% but a decline in business confidence. The Global dairy trade index was showing signs of stabilizing posting a third consecutive bullish print, rising 10.9%. However, investors seem to be shunning the risk currencies in favor of the Yen leading to declines in the Kiwi and the Aussie dollars.
- Building consents m/m 20.4% vs. -3.3% previously
- ANZ Business confidence -29.1 vs. -15.3 previously
- GDT price index 10.9% vs. 14.8% previously
- Overseas trade index q/q 1.3% vs. -1.9%
- ANZ Commodity prices m/m -5.2% vs. -5.5% previously
USDJPY (119.1): The Yen is poised to make another week of gains against the USDJPY, currently trading at 119.1. The declines come after an attempt to recover some of the losses from a week ago but price action looks set to pose a strong reversal with a continued momentum to the downside. Data from Japan this week was dovish with the average cash earnings rising 0.6% and a weak manufacturing PMI print. The preliminary industrial production also declined by -0.6% for the month.
- Prelim industrial production m/m -0.6% vs. 0.1%
- Housing starts y/y 7.4% vs. 11.2%
- Capital spending q/y 5.6% vs. 9.0%
- Final manufacturing PMI 51.7 vs. 51.9
- Average cash earnings 0.6% vs. 2.1%
USDCAD (1.32): USDCAD was trading flat for the week led by volatility in the Crude oil prices. There was not much of data from Canada this week with the exception of the monthly GDP which printed a bullish 0.5% growth beating estimates. Friday’s jobs report was however disappointing as the Canadian unemployment rate increased to 7% from 6.8% despite the Canadian economy adding 12k jobs beating estimates of a decline of -4.8k.
- Current account -17.4bn vs. -17.2bn
- GDP m/m 0.5% vs. 0.2%
- RBC manufacturing PMI 49.4 vs. 50.8 previously
- Trade balance -0.6bn vs. -1.4bn
- Employment change 12.0k vs. -4.8k
- Unemployment rate 7.0% vs. 6.8%
- Labor productivity q/q -0.6% vs. -0.7%
GBPUSD (1.52): The Cable continues to remain weak with GBPUSD down -1.3% for the week as the British Pound hit the lows of 1.5215 at the time of writing. There were no major market impacting news releases but the PMI data was soft across the board with the hitherto stronger services PMI also falling below estimates. A close below 1.52 will no doubt see the GBPUSD test the psychological 1.50 round number.
- Manufacturing PMI 51.5 vs. 51.9
- M4 money supply m/m 1.0% vs. 0.2%
- Mortgage approvals 69k vs. 68k
- Construction PMI 57.3 vs. 57.6
- Services PMI 55.6 vs. 57.6
USDCHF (0.97): The USDCHF continued to make new grounds this week with the Greenback gaining over 1.27% at the time of writing. Economic data from Switzerland included the manufacturing PMI which increased surprisingly to 52.2, beating estimates of 49.9, but inflation remained subdued, coming in at -0.2%.
- KOF Economic barometer 100.7 vs. 99..9
- Manufacturing PMI 52.2 vs. 49.9
- CPI m/m -0.2% vs. -0.2%
US Dollar Index (96.3): Economic data from the US this week was mixed but the markets were tuned more to the Friday’s jobs report than anything else. The ADP private payroll numbers which was released on Wednesday showed the US economy adding less than expected jobs but the markets largely ignored the data. Friday’s NFP was a complete mixed bag. While the US added a meager 173k jobs, below estimates, the unemployment rate improved to 5.1%, while the average hourly earnings increased 0.3%. On the headline, the August NFP looks poised to work in the favor of a Fed rate hike in September. The US Dollar Index was trading 0.21% higher for the week and did not see any major reaction to the NFP data.
- Final manufacturing PMI 53 vs. 52.9
- ISM manufacturing PMI 51.1 vs. 52.6
- Construction spending m/m 0.7% vs. 0.8%
- ISM manufacturing prices 39 vs. 39.7
- ADP Nonfarm employment change 190k vs. 204k
- Revised nonfarm productivity q/q 3.3% vs. 2.9%
- Revised unit labor costs q/q -1.4% vs. -0.5%
- Trade balance -41.9bn vs. -43.2bn
- Weekly unemployment claims 282k vs. 273k
- Final services PMI 56.1 vs. 55.2
- ISM non-manufacturing PMI 59 vs. 58.3
- Average hourly earnings m/m 0.3% vs. 0.2%
- Nonfarm employment change 173k vs. 215k
- Unemployment rate 5.1% vs. 5.2%
