Earlier in the Day:
It was another busy start to the day on the economic calendar this morning. The Japanese Yen, the Aussie Dollar, the Kiwi Dollar were all in action this morning, with economic data from China also in focus.
On the monetary policy front, the RBA will also deliver its June policy decision later this morning.
For the Japanese Yen
Capital spending and finalized manufacturing PMI figures were in focus
In the 1st quarter, capital spending fell by 7.8%, year-on-year. In the 4th quarter, capital spending had been down by 4.8%.
The manufacturing PMI declined from 53.6 to 53.0 in May. This was an upward revision to a prelim 52.5, however
According to the finalized May survey,
- There was a moderate improvement in operating conditions.
- Production volumes and new orders continued to provide support in spite of softer expansions in May.
- Staffing levels rose for a 2nd consecutive month, with businesses optimistic about the year-ahead.
- Business sentiment hit the second highest level in the index’s 9-year history.
The Japanese Yen moved from JPY109.511 to JPY109.412 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.16% to JPY109.40 against the U.S Dollar.
For the Kiwi Dollar
Building consents rose by 4.8% in the month of April. In March, consents had surged by 19.2%.
According to NZ Stats,
- Compared with April 2020, consents were up 84%.
- In year ended April 2021, the number of new homes consented stood at a series high 42,848.
The Kiwi Dollar moved from $0.72793 to $0.72804 upon release of the figures. At the time of writing, the Kiwi Dollar up by 0.22% to $0.7286
For the Aussie Dollar
The AIG Manufacturing Index increased from 61.7 to 61.8 in May.
The Aussie Dollar moved from $0.77387 to $0.77411 upon release of the figures.
Building approvals slid by 8.6% in April, partially reversing a 17.4% surge from March. Economists had forecast a 10.0% tumble.
According to the ABS,
- Private sector dwellings excluding houses fell 28.6%, while private sector houses rose 4.6%.
Company Operating Profits also failed to impress.
According to the ABS, company gross operating profits declined by 0.3% in the 1st quarter following a 4.8% fall from the 4th quarter of last year. Economists had forecast a 3.0% rise.
Current account figures were also in focus this morning.
According to the ABS,
- Australia’s current account surplus jumped from A$14.5bn to a record A$18.3bn in the 1st quarter. Economists had forecast a rise to A$17.9bn.
- A record A$5.2bn increase in the balance on the goods and services surplus delivered the upside.
- Exports of goods and services rose A$7.8bn, while imports of goods and services rose A$2.6bn.
The Aussie Dollar moved from $0.77578 to $0.77628 upon release of the figures. At the time of writing, the was Aussie Dollar was up by 0.40% to $0.7765.
Out of China
In May, the Caixin Manufacturing PMI rose from 51.9 to 52.0. Economists had forecast a hold at 51.9.
According to the May survey,
- New orders rose at the sharpest pace in 5-months, driving a further expansion in production.
- The rate of increase in production softened, however. Reports of material shortages and higher purchasing costs pegged production back.
- Supplier’s delivery times lengthened, driving input prices upwards.
- As a result of cost control measures, employment was broadly stable in the month.
- While firms remained optimistic about the year ahead, the level of optimism dipped to a 4-month low. Concerns over rising costs and pandemic-related uncertainty weighed.
The Aussie Dollar moved from $0.77628 to $0.77672 upon release of the figures.
The Day Ahead
For the EUR
It’s a busy day ahead on the economic data front. Manufacturing PMI numbers for Italy and Spain, unemployment numbers for Germany, and unemployment and inflation figures for the Eurozone are due out.
Finalized manufacturing PMIs for France, Germany, and the Eurozone are also due out.
Barring marked revisions to the French and German PMIs, expect Italy and the Eurozone’s PMIs and German unemployment figures to be key.
At the time of writing, the EUR was up by 0.105% to $1.2233.
For the Pound
It’s a relatively busy day ahead on the economic calendar. Economic data includes house price figures and May’s finalized manufacturing PMI.
Expect any revisions to the PMI to have a greater impact on the Pound.
On the monetary policy front, BoE governor Bailey is also scheduled to speak late in the day. Any hawkish chatter and the Pound will likely target $1.43 levels.
At the time of writing, the Pound was up by 0.21% to $1.4242.
Across the Pond
It’s a relatively quiet day ahead on the calendar, with the manufacturing sector also in focus.
The Markit survey’s finalized PMI and the market’s preferred ISM Manufacturing PMI are due out.
Expect the ISM number to draw the greatest interest.
Chatter from FOMC members and Capitol Hill will also need monitoring on the day.
At the time of writing, the Dollar Spot Index was down by 0.08% to 89.756.
For the Loonie
It’s a busy day ahead on the economic data front. 1st quarter GDP numbers are due out later today.
Following a more hawkish than anticipated BoC, expect plenty of influence from today’s numbers.
At the time of writing, the Loonie was up by 0.12% to C$1.2050 against the U.S Dollar.
For a look at all of today’s economic events, check out our economic calendar.
