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It’s a Quiet Economic Calendar. Riskier Assets Will Need another Catalyst…

Bob Mason

Earlier in the Day:

It was another busy start to the day on the economic calendar on Wednesday. The Aussie Dollar, Kiwi Dollar, and the Japanese Yen were in action early on.

Following Tuesday’s rally, however, there was an uptick in new COVID-19 cases to consider.

Looking at the latest coronavirus numbers.

On Tuesday, the number of new coronavirus cases rose by 156,317 to 8,256,659. On Monday, the number of new cases had risen by 115,910. The daily increase was higher than Monday’s rise and up from 128,377 new cases from the previous Tuesday.

Germany, Italy, and Spain reported 767 new cases on Tuesday, which was down from 855 new cases on Monday. On the previous Tuesday, 843 new cases had been reported.

From the U.S, the total number of cases rose by 26,844 to 2,208,400 on Tuesday. On Monday, the total number of cases had risen by 19,412. On Tuesday, 9th June, a total of 19,894 new cases had been reported.

For the Kiwi Dollar

1st quarter current account figures were in focus that had a muted impact on the Kiwi.

Quarter-on-quarter, the current account balance rose from a NZ$2.66bn deficit to a NZ$1.56bn surplus. Economists had forecast a surplus of NZ$1.48bn.

Year-on-year, the current account deficit narrowed from NZ$9.23bn to NZ$8.51bn. Economists had forecast a narrowing to NZ$8.47bn.

The Kiwi Dollar moved from $0.64425 to $0.64490 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.09% to $0.6445.

For the Aussie Dollar

The housing sector was back in focus. According to the HIA, new home sales fell by 4.20% in May, following a 1.1% fall in April. Economists had forecast a 0.5% decline.

The Aussie Dollar moved from $0.68933 to $0.68793 upon release of the figures and minutes. At the time of writing, the Aussie Dollar was down by 0.28% to $0.6870.

For the Japanese Yen

Japan’s trade deficit narrowed from ¥931.9bn to ¥833.4bn in May. Economists had forecast a narrowing to ¥560.0bn.

According to figures released by the  Ministry of Finance,

  • Exports tumbled by 28.3% in May, following a 21.9% slide in April. Economists had forecast a 22.7% slide.
    • Exports to China fell by 1.9%, with exports to South Korea and Thailand sliding by 18% and by 32.9% respectively.
    • To the U.S, exports slumped by 50.6%, with exports tumbling by 35.4% to Western Europe.
    • Exports to Germany fell by 35.5%, with exports to the UK tumbling by 38.2%.
  • Imports tumbled by 26.2% in May, following a 7.1% decline in April. Economists had forecast a 12.9% slide.
    • Imports from China fell by 2.0%, while imports from HK tumbled by 39%.
    • From the U.S imports slumped by 27.5%, with imports from the EU falling by 30.9%.

The Japanese Yen moved from ¥107.369 to ¥107.278 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.08% to ¥107.23 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. May’s finalized inflation figures for the Eurozone are due out later today.

We would expect the figures to have a muted impact on the EUR, however. Market risk sentiment and continued reaction to FED Chair Powell’s testimony will be the key driver.

For the EUR, a lack of a material spike in new COVID-19 cases remains positive. While China and the U.S have seen a pickup in new cases, the most adversely affected EU states have yet to report a similar trend.

At the time of writing, the EUR was up by 0.06% to $1.1271.

For the Pound

It’s a relatively busy day ahead on the economic calendar. Key stats include May inflation figures that should have a muted impact on the Pound ahead of tomorrow’s BoE monetary policy decision.

The focus on the day will be on Brexit, as the EU and the British government look to avoid a hard Brexit event.

At the time of writing, the Pound was down by 0.09% to $1.2562.

Across the Pond

It’s also a relatively busy day ahead on the U.S economic calendar. Key stats include building permits and housing start figures for May.

We aren’t expecting too much influence from the stats, however. The housing sector has seen activity rebound as lockdown measures ease, supported by mortgage rates hovering at record lows.

With the stats of little influence, FED Chair Powell’s 2nd day of testimony to Congress may draw some interest. At the start of the week, we saw the FED prop up the U.S equity markets… Will there be any more probing questions into the FED’s decision to begin purchasing individual corporate bonds?

At the time of writing, the Dollar Spot Index was up by 0.05% to 97.008.

For the Loonie

It’s a busy day ahead on the economic calendar, with May inflation figures due out later today.

We can expect some influence from the numbers, though the weekly crude oil inventory numbers and market risk sentiment will remain key drivers.

There’s also OPEC’s monthly report to consider…

At the time of writing, the Loonie was down by 0.04% to C$1.3546 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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