Earlier in the Day During the Day During the Day During the Day During
On the economic calendar this morning, it was again another pretty busy start to the day. The Australian Dollar was in the spotlight, with the Reserve Bank of New Zealand (RBNZ) also in play. Finalized industrial production data from Japan will also be released later this morning.
The Australian Dollar
This morning, consumer confidence was a hot topic. The Westpac Consumer Confidence Index increased 1.5 percent to 108.8 in July. Economists predicted a 2.5 percent drop to 105.0.
Despite COVID-19 limits in Sydney, a boost in confidence occurred, according to the latest Westpac Report.
The uptick came as a result of a significant increase in confidence in Victoria and Western Australia.
Analyzing the sub-components
Family funds climbed by 4.6 percent year over year to 93.7, while finances for the next 12 months increased by 2.5 percent to 109.9.
Sentiment about the near-term economic prospects increased, with the next 12-month economic conditions climbing 0.8 percent to 109.5.
However, the Economic Conditions for the Next Five Years fell by 3.1 percent to 110.5.
The unemployment expectations index, which rose 1.1 percent to 109.6, also disappointed.
Despite this, the average time to purchase a key home item increased by 3.5 percent to 120.6 days.
Following the release of the numbers, the Australian dollar rose from $0.74430 to $0.744250. The Australian Dollar was up 0.21 percent to $0.7463 at the time of writing.
In terms of the New Zealand dollar, the RBNZ kept the official cash rate at 0.25 percent and the Funding for Lending program at the same level, which was in line with market expectations. The RBNZ did, however, agree to stop additional asset purchases under the LSAP programme by July 23rd, surprising the markets.
The following are some key points from the Rate Statement:
The Committee underlined that global economic growth has been improving, with a bright future ahead.
Household spending was encouraged by rising immunization rates in many nations, as well as supportive monetary and fiscal policies.
However, ongoing health and economic dangers remained, since some COVID-19 containment measures needed to be reinstated.
Despite international border limitations, the New Zealand economy appears to be strong, according to recent economic data.
The overall level of economic activity is higher than it was prior to COVID-19.
Since late 2020, economic conditions have been consistently greater than expected.
Economic confidence has risen from its extreme lows, resulting in continued solid employment growth.
The absence of overseas tourists has been compensated for by exports and domestic expenditure.
Inflationary rises in the near term are projected to be transient.
The Committee concluded that the substantial monetary policy support that has been in place since mid-2020 might be withdrawn sooner.
Members agreed that some monetary stimulus is still needed to keep CPI inflation at the target midpoint of 2% and guarantee that employment is at its greatest sustainable level.
Following the judgment, the New Zealand dollar rose from $0.69690 to $0.70030. The New Zealand Dollar was up 0.95 percent to $0.70140 at the time of writing.
The Yen (Japanese yen) is a currency in Japan
Industrial production data are expected to be released later this morning.
The Japanese yen was up 0.09 percent against the US dollar at JPY110.530 at the time of writing.
For the EUR, the Day Ahead
On the economic data front, it’s going to be a busy day. Spain’s finalized June inflation figures, as well as Eurozone industrial production data, will be released later this morning.
The industrial production data for May are expected to garner a lot of interest. The markets have recently become anxious about the economy’s long-term viability. Weak numbers will put the EUR’s support to the test.
The EUR was up 0.04 percent at $1.1781 at the time of writing.
The UK inflation numbers are due out later this morning, making it a busier day on the economic calendar for the Pound.
Expect plenty of Pound sensitivity to today’s stats, as the markets have little else to think about. Softer inflation would reduce the pressure on the Bank of England to act quickly.
COVID-19 and its Delta variant will continue to be a near-term driver, regardless of the economic calendar.
The Pound was up 0.04 percent at $1.3820 at the time of writing.
Across the Water
On the economic calendar, today is a calm day. There are no significant statistics due from the United States to guide the markets.
Due to a paucity of data, the Greenback will be at the mercy of central bank talk and market risk sentiment on the day.
The Dollar Spot Index was down 0.01 percent to 92.739 at the time of writing.
The Loonie is a currency used in Canada.
On the economic data front, it’s going to be a busy day. Manufacturing sales numbers for May will be released later today.
With the Bank of Canada in action this afternoon, we don’t expect the figures to have an impact.
Markets expect the Bank of Canada to maintain its policy stance, thus the focus will be on the Bank’s economic forecast and any policy forward guidance.
The Loonie was up 0.12 percent against the US Dollar at the time of writing, trading at C$1.2498.
Check out our economic calendar for a complete list of today’s economic happenings./n
