Australian Dollar
After plummeting on Wednesday’s inflation data shock, the Australian Dollar managed to recover some ground yesterday on correctional trading. Weakness in the US Dollar helped after the Federal Open Market Committee (FOMC) once again held interest rates at 0.50%. However, the only data available for the day showed a much-worse-than-forecast decline in import and export prices during the first quarter of the year.
Today sees mostly low-impact data from Australia, with the highest profile release being private sector credit figures for March. However, a speech from the RBA’s Guy Debelle could provoke some movement for the ‘Aussie’.
Sterling
The Australian Dollar slipped into negative territory against Pound Sterling yesterday, despite several weakening factors, which included a slowdown in housing prices and fresh ‘Brexit’ developments. However, the UK asset managed to remain ascendant, partly thanks to the continued perception that fears of a ‘Leave’ victory in the referendum have been over-priced.
The latest developments in the ‘Brexit’ argument included a joint warning from one-time enemies David Cameron and ex-trade union leader Brendan Barber, as well as a pro-‘Brexit’ forecast from economists. The alliance of the Prime Minister and a trade unionist seems to have been more influential than the emergence of the group Economists for ‘Brexit’, which saw eight economists suggest a split from the EU could boost GDP by 4% and lower prices by -8%. Despite their assertions, Pound Sterling remained in positive territory.
Today’s UK data includes the Gfk Consumer Confidence survey, as well as net consumer credit and mortgage approvals figures.
Euro
German consumer price index data revealed the anticipated weakening in inflationary pressures during April. Prices grew 0.1% on an annualised basis, down from 0.3% in March, while on the month the CPI revealed deflation of -0.2%. Germany is the Eurozone’s powerhouse economy, so a softening of inflationary pressures here could suggest other economies in the currency bloc will have seen weak or negative growth for consumer prices.
However, the Euro was protected from the weakening effect of the poor data by other positive releases, even if it did increase European Central Bank (ECB) stimulus bets. 16,000 people left the ranks of the unemployed in April, against forecasts of no change, while the majority of the confidence indexes improved by more-than-expected.
The Eurozone consumer price index is due out today and could repeat the performance of the German index by printing lower than the previous month’s readings, as it is forecast to do.
US Dollar
Conflicting signals from the latest high-profile US data kept the US Dollar soft overall yesterday. With interest rates left on hold again and the Federal Open Market Committee (FOMC) having signalled less of a focus on global risks, all eyes were on the forthcoming high profile data releases.
Gross Domestic Product disappointed, with the annualised figure slowing even further-than-anticipated from 1.4% to 0.5%, instead of the 0.7% predicted. The number of jobless claims as of April 22nd was marginally higher-than-anticipated. However, personal consumption expenditure figures outperformed forecasts, suggesting building inflationary pressures.
Personal spending figures for March are due out later today.
Canadian Dollar
The Canadian Dollar put on a mixed performance yesterday, with concerns over the domestic oil industry clashing with the current strength of the global oil markets. The Conference Board of Canada released its latest outlook, in which it predicts a loss of -CA$3 billion in 2016 for the domestic oil extraction industry and a loss of -CA$1 billion for producers of natural gas. However, oil futures rose above US$45.30 for WTI Crude and US$47 per barrel for Brent Crude oil, giving the ‘Loonie’ some support.
Canadian Gross Domestic Product figures for February are due out today. The Canadian economy is expected to have contracted -0.1% after 0.6% growth in January, while annual expansion is predicted to show a slight uptick to 1.6%.
New Zealand Dollar
The Reserve Bank of New Zealand (RBNZ) left interest rates on hold during yesterday’s policy meeting, claiming that strength in the domestic economy was helping New Zealand to ride out the global economic storm. However the RBNZ did note that the current strength of the ‘Kiwi’ was undesirable and harming the country’s imports and exports. RBNZ Governor Graeme Wheeler suggested that a further rate cut may be necessary in the future.
The most impactful data today will be the NBNZ Business Confidence index, although the ANZ Activity Outlook index and building permits figures could further strengthen or weaken the macroeconomic picture.
Data Released
April 29th 09.05 GBP GfK Consumer Confidence Survey (APR) -1
April 29th 11.00 NZD NBNZ Business Confidence (APR)
April 29th 11.30 AUD Private Sector Credit (YoY) (MAR) 6.6%
April 29th 19.00 EUR Eurozone Consumer Price Index Estimate (YoY) (APR) 0.0%
April 29th 19.00 EUR Eurozone Gross Domestic Product s.a. (YoY) (1Q A) 1.4%
April 29th 22.30 USD Personal Income (MAR) 0.3%
April 29th 22.30 USD Personal Spending (MAR) 0.2%
April 29th 22.30 CAD Gross Domestic Product (YoY) (FEB) 1.6%