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A Quiet Economic Calendar Leaves Trade Chatter in Focus

Bob Mason
A relatively quiet economic calendar leaves Brexit and trade war chatter in focus. Is the trade spat about to get worse and can Theresa May deliver?

Earlier in the Day:

Economic data released through the Asian session was on the lighter side this morning. Key stats were limited to New Zealand wholesale inflation and Business PMI figures.

For the Kiwi Dollar,

The Business PMI increased from 51.9 to 53.0 in April, falling short of a forecasted 54.5. According to the BusinessNZ PMI Survey,

  • The new orders sub-index slipped from 52.7 to 52.4, with the production index easing from 50.9 to 50.8.
  • Another negative was a decline in the employment sub-index, which fell from 52.0 to 51.6. In spite of the decline, the sub-index continued to hold above the long-run average of 50.7.
  • Supporting the increase was a jump in deliveries. The deliveries sub-index rose from 52.7 to 56.3.

BusinessNZ also noted that, in spite of the PMI increase, the number of positive comments for April stood at 48.9%, down from 52.6% in March.

Negative comments related to a lack of orders and customer demand, in addition to seasonal factors that included Easter.

The Kiwi Dollar moved from $0.65381 to $0.65362 upon release of the figures that preceded the wholesale inflation numbers.

The Producer Price Input Index fell by 0.9% in the 1st quarter, falling well short of a forecasted 1.4% increase. In the 4th quarter, the Index had increased by 1.6%. According to figures released by NZStats, it was the first quarterly decline since the 1st quarter of 2016. The decline was attributed to a slide in electricity generation prices.

The Kiwi Dollar moved from $0.65362 to $0.65361 upon release of the figures. At the time of writing, the Kiwi Dollar was down 0.05% to $0.6533.

Elsewhere,

At the time of writing, the Aussie Dollar was down 0.01% to $0.6891, while the Japanese Yen was down by 0.11% to ¥109.97 against the U.S Dollar.

The Day Ahead:

For the EUR,

It’s another relatively quiet day ahead. April inflation figures are due out of the Eurozone later this morning.

The core annual rate of inflation and the annual rate of inflation figures are finalized numbers that are unlikely to have a material impact on the EUR, barring a sizeable adjustment from prelim.

The focus will likely be on the month-on-month figure that is forecasted to be EUR negative.

Outside of the numbers, trade war chatter will continue to influence through the day. The EU may be off the hook for now, but it may only be a matter of time if U.S stats continue to improve…

At the time of writing, the EUR was up 0.02% at $1.1176.

For the Pound,

There are no material stats due out of the UK today.

The focus will remain on Brexit and political chatter. Rising support for the likes of the Brexit Party and an imminent change to the Tory Party leadership brings some uncertainty to what lies ahead.

Mainstream politics, while proving to be unmalleable, is palatable for the markets. A material shift in the political landscape can’t be a good thing for the Pound near-term. Even the threat has led to the Pound to sub-$1.28 levels…

At the time of writing, the Pound was down 0.09% to $1.2786.

Across the Pond,

It’s a relatively quiet day on the economic calendar. While on the lighter side, May consumer sentiment figures will provide the Greenback with direction later today. Forecasts are mixed, with the consumer expectations index forecasted to fall, while the consumer sentiment index is forecasted to be Dollar positive.

Outside of the numbers, the Oval Office will continue to influence. Things are heating up with China and the latest Huawei outburst could set back trade talks even further…

At the time of writing, the Dollar Spot Index was up 0.01% to 97.861.

For the Loonie,

It’s a quiet day ahead on the economic data front.

Any progress on metal tariffs will provide the Loonie with support, though much will depend on market sentiment towards the U.S – China trade war.

A pickup in oil prices in the early part of the morning failed to give the Loonie a boost…

The Loonie was down 0.01% at C$1.3462, against the U.S Dollar, at the time of writing.

This article was originally posted on FX Empire

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