Economic Data Puts the EUR and the Dollar in Spotlight, with the Middle East also in Focus

Earlier in the Day

It’s was a busy start to the day on the economic calendar this morning. The Aussie Dollar, the Kiwi Dollar, and the Japanese Yen were in action this morning.

On the geopolitical risk front, news from Bloomberg of the U.S bombing Iran-backed groups in Syria will also test market risk appetite. How Iran responds, if at all, will be key.

For the Kiwi Dollar

The trade surplus narrowed from NZ$2,980m to NZ$2,750m in January, year-on-year. The monthly trade balance fell from a NZ$69m surplus to a NZ$626m deficit in January.

According to NZ Stats,

• Goods exports fell NZ$486m (10%) to NZ$4.2bn, while goods imports fell by a lesser NZ$256m (5%) to NZ$4.8m.

Exports

• There was a notable NZ$172m fall in the exports of milk powder, butter, and cheese (-11%).
• Exports of meat and edible offal slid by NZ$141m (-18%), with preparations of milk, cereal, flour, and start exports down NZ$64m (41%).

Imports

• Crude oil exports fell by NZ$288m (-61%), with mechanical machinery and equipment exports down NZ$122m (-15%).
• Fuel exports fell by NZ$85m (-36%).

The Kiwi Dollar moved from $0.73659 to $0.73691 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.34% to $0.7348.

For the Japanese Yen

Inflation, industrial production, and retail sales figures were in focus this morning.

In February, deflationary pressures lingered, with Tokyo core consumer prices falling by 0.3%, year-on-year. In January, core consumer prices had fallen by 0.4%.

According to the Ministry of Internal Affairs and Communication,

• Fuel, light, and water charges slumped by 8.0%.
• Prices for education (-1.9%), transportation & communication (-0.6%), and medical care (-0.1%) also weighed.
• Furniture and household utensil prices increased by 2.9%, however, with prices for clothes & footwear rising by 0.5%.
• There were also increases in prices for housing (+0.7%) and culture & recreation (+0.1%).

The Japanese Yen moved from ¥106.345 to ¥106.373 upon release of the figures that preceded industrial production and retail sales figures.

Industrial production jumped by 4.2% in January, reversing a 1.0% fall from December, according to prelim figures. Economists had forecast a 4.0% rise.

According to the Ministry of Economy, Trade and Industry,

Industries that mainly contributed to the increase were:

• General-purpose and business orientated machinery.
• Electronic parts and devices.
• Electrical machinery, and information, and communication.

Industries that mainly contributed to the decrease were:

• Transport equipment (excl. motor vehicles).
• Petroleum and coal products.

Retail sales slid by 2.4% in January, following a 0.2% decline in December according to the Ministry of Economy, Trade and Industry. Economists had forecast a 2.6% decline.

The Japanese Yen moved from ¥106.378 to ¥106.395 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.07% to ¥106.28 against the U.S Dollar.

For the Aussie Dollar

Financial aggregate figures from the RBA were in focus this morning.

Total credit increased by 0.2% in January, following a 0.3% rise in December.

According to the RBA,

• Housing credit increased by 0.4% in the month of January, following a 0.4% rise in December.
• Business credit slipped by 0.1%, following a 0.3% rise in December.
• Personal credit slumped by 0.9%, following on from a 0.5% decline in December.
• Year-on-year, total credit was up by 1.7%. In January 2020, total credit risen by 2.5%.
• Personal credit was a drag, tumbling by 12.4% year-on-year. In January 2020, personal credit had fallen by 5.0%.

The Aussie Dollar moved from $0.78362 to $0.78493 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.33% to $0.7847.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. French consumer spending figures are due out along with 2^nd estimate GDP numbers for the 4^th quarter.

Expect both sets of numbers to draw interest.

Prelim February inflation figures from Spain are also due out, which could draw more attention than usual.

At the time of writing, the EUR was down by 0.17% to $1.2154.

For the Pound

It’s another quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction.

The lack of stats will leave the Pound in the hands of market risk sentiment on the day.

At the time of writing, the Pound was down by 0.19% to $1.3989.

Across the Pond

It’s a busy day ahead on the economic calendar. January inflation and personal spending figures are due out later today.

Other stats include business inventories, Chicago PMI, trade data, and finalized consumer sentiment figures. These are unlikely to have a material impact on the Dollar, however.

Away from the economic calendar, chatter from Capitol Hill and from FOMC members will also need monitoring.

At the time of writing, the Dollar Spot Index was up by 0.25% to 90.358.

For the Loonie

It’s a relatively quiet day ahead. RMPI numbers for January are due out later today.

With little else to focus on, we can expect some Loonie sensitivity to the numbers.

Expect market risk sentiment and influence on crude oil prices, however, to remain the key driver.

At the time of writing, the Loonie was down by 0.13% to C$1.2620 against the U.S Dollar.

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