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Stats, Corporate Earnings and Trade War Chatter in Focus

Bob Mason
It was a mixed bag on the data front in Asia as Japan sees exports tumble. Corporate earnings also disappointed as trade war angst returns…

Earlier in the Day:

Economic data released during the Asian session this morning was on the busier side. Key stats included Japan’s June trade figures and Australia’s June employment numbers. The National Bank of Australia also released its quarterly business confidence survey results.

For the Japanese Yen

Japan’s trade balance recovered from a ¥968.3bn deficit to a ¥589.5 surplus in June. Economists had forecast a surplus of ¥420bn.

According to figures released by the  Ministry of Finance,

  • Exports fell by 6.7% compared with June 2018, while imports fell by 5.2% over the same period.

  • Exports to Asia fell by 8.2%, with a 10.1% fall in exports to China and 14.8% fall in exports to R Korea doing the damage.

  • To Europe, an 8.2% fall in exports to Germany and 5.2% fall in exports to the Netherlands saw exports to Europe fall by 9.4%.

  • Exports to the U.S rose by 4.8% and by 4.1% to Canada.

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The Japanese Yen moved from ¥107.943 to ¥107.945 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.24% to ¥107.69 against the U.S Dollar.

For the Aussie Dollar

June employment figures provided the Aussie Dollar with direction in the early hours. According to figures released by the ABS,

  • Employment increased by 26,300 persons in employment in June.

  • There was a net increase of 15,000 persons in full-time employment, while there was an 11,300 increase in part-time employment.

  • Year-on-year, full-time employment increased by 248,900 persons, while part-time employment increased by 79,000 persons.

  • The unemployment rate held steady at 5.2%, which was in line with forecast.

  • Seasonally adjusted, the participation rate also held steady at 66.0%.

The NAB’s Quarterly Business Confidence Index increased from 0 to +6 in the 2nd quarter. According to the latest survey,

  • The sub-indexes for sentiment towards conditions over the next 3-months fell from 14 to 12. The sentiment towards the next 12-months sub-index rose from 22 to 23.

  • CAPEX intentions over the next 12-months increased from 22 to 24.

  • The profitability sub-index fell from -1 to -4, with the forward orders sub-index falling from -2 to -3.

  • The exports sub-index remained unchanged at zero.

  • On the employment front, the sub-index fell from 7 to 4. Employment expectations over next 3-months fell from 9 to 5, with the employment expectations sub-index for next 12-months falling from 19 to 16.

  • .While the business confidence index showed some improvement, the business conditions index fell from 4 to 1.

The Aussie Dollar moved from $0.0.7012 to $0.70194 upon release of the figures. At the time of writing, the Aussie Dollar up by 0.34% to $0.7034.

Elsewhere

At the time of writing, the Kiwi Dollar was up by 0.19% to $0.6744.

The Day Ahead:

For the EUR

It’s a quiet day ahead on the economic calendar. With no material stats due out on the day, the focus will be on Philly FED manufacturing PMI numbers due out of the U.S later today.

Outside of the stats, market sentiment towards the U.S economy and updates from the U.S – China trade talks will also be in focus.

At the time of writing, the EUR was up by 0.13% to $1.1239.

For the Pound

It’s another big day ahead, with the UK’s retail sales figures due out later this morning.

Following particularly disappointing BRC retail sales figures the numbers will need to impress to support the Pound.

Outside of the numbers, the result of the Conservative Party leadership race is just around the corner. Any chatter from Parliament will also need to be considered

At the time of writing, the Pound was up by 0.06% to $1.2441.

Across the Pond

July’s Philly FED Manufacturing figures are due out later this morning. We can expect the Dollar to be sensitive to the numbers.

Barring particularly dire numbers, we expect the weekly jobless claims figures to have a muted impact on the Dollar.

Outside of the numbers, chatter from the Oval Office will also need to be considered on the day along with corporate earnings.

At the time of writing, the Dollar Spot Index was down by 0.13% to 97.097.

For the Loonie

It’s a quiet day ahead, with no material stats due out of Canada later today.

A lack of stats leaves the crude oil prices and market risk sentiment to provide direction on the day.

The Loonie was up 0.01% at C$1.3053, against the U.S Dollar, at the time of writing.

This article was originally posted on FX Empire

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