Private Sector PMIs and ADP Employment Change Numbers Put the EUR, GBP, and USD in Focus

Earlier in the Day:

It was a busy start to the day on the economic calendar this morning. The Japanese Yen, and the Aussie Dollar were in action this morning. Economic data from China was also in focus.

For the Japanese Yen

Capital spending increased by 5.3%, year-on-year, in the 2^nd quarter, partially reversing a 7.8% slide from the previous quarter.

The Japanese Yen moved from ¥110.002 to ¥110.082 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.17% to ¥110.210 against the U.S Dollar.

For the Aussie Dollar

Earlier in the session, manufacturing data had disappointed, with the AIG Manufacturing PMI falling from 60.8 to 51.6. There was little influence, however, with the markets looking ahead to GDP numbers and PMI numbers from China.

In the 2^nd quarter, the Australian economy expanded by 0.7%, quarter-on-quarter, following 1.8% growth in the previous quarter. Economists had forecast growth of 0.5%.

Year-on-year, the economy grew by 9.6% versus a forecasted 9.2%. In the 1^st quarter, the economy had grown by 1.1%.

The Aussie Dollar moved from $0.73097 to $0.73157 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.04% to $0.7319.

Out of China

Private sector PMI numbers were the key stats of the morning.

In August, the Caixin Manufacturing PMI fell from 50.3 to 49.2. Economists had forecast a more modest decline to 50.2.

According to the August survey,

• It was the first fall in output since February 2020.
• Total new work fell for a second consecutive month, though the decline was modest. Demand was muted at home and overseas as a result of the COVID-19 pandemic.
• New exports declined for the first time since February.
• Employment saw a modest decline after remaining unchanged in July, though some firms reduced headcounts due to reduced output requirements.
• Higher raw material prices and greater transportation costs drove a further marked increase in overall input prices. Factory gate prices rose only modestly, however.
• Business optimism remained strong overall, though unchanged from July’s 15-month low.
• Concerns over how long the pandemic will take to be brought under control weighed on sentiment.

The Aussie Dollar moved from $0.73157 to $0.73167 upon release of the figures that followed GDP numbers from Australia.

Elsewhere

At the time of writing, the Kiwi Dollar was down by 0.01% to $0.7044.

The Day Ahead

For the EUR

It’s another busy day ahead on the economic data front.  Ahead of the European open, German retail sales figures will draw interest. With consumer spending key, we can expect EUR sensitivity to the numbers.

Later in the morning, however, August manufacturing PMIs for Italy and Spain and finalized PMIs for France, Germany, and the Eurozone will also influence.

Barring marked revisions to the prelim PMIs, expect Italy and the Eurozone’s PMIs to be key.

At the time of writing, the EUR was down by 0.03% to $1.1805.

For the Pound

It’s a relatively quiet day ahead on the economic calendar. Finalized manufacturing PMI figures for August will be in focus later today.

Barring any marked revision to prelim figures, however, the numbers are unlikely to have a material impact on the Pound.

At the time of writing, the Pound was down by 0.12% to $1.3739.

Across the Pond

It’s a busy day ahead. The market’s preferred ISM Manufacturing PMI and ADP nonfarm employment change figures will be in focus.

While the headline PMI will influence, the focus will likely be on the employment sub-index and the ADP numbers.

Another sharp increase in payrolls and it is expected to give the FED a green light on the tapering front.

At the time of writing, the U.S Dollar Spot Index was up by 0.11% to 92.626.

For the Loonie

It’s a quiet day on the economic calendar. There are no material stats to provide the Loonie with direction. The lack of stats will leave the Loonie in the hands of manufacturing PMI numbers and crude oil inventories.

At the time of writing, the Loonie was down by 0.10% to C$1.2628 against the U.S Dollar.

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