Australian Dollar
Disappointment over the latest labour market data kept the ‘Aussie’ on a downtrend yesterday. The unemployment rate unexpectedly fell to 5.6%, but this was due to a fall in the number of out-of-work people seeking employment, with the participation rate edging down to 64.7%. The labour market lost -3.9k roles in August, against forecasts of adding 15k jobs, while the previous month’s gains were revised marginally lower. With the number of part time workers falling by just over the number of people gaining full time work it seems the labour market titled more towards permanent staff rather than adding new roles. Also disappointing was the fact that consumer inflation expectations weakened from 3.5% to 3.3%.
There is no Australian data on the calendar today, although the headline US releases are likely to cause volatility for the ‘Aussie’.
Sterling
The Bank of England (BoE) signalled that it was prepared to cut interest rates again in the near-term yesterday, allowing the weakened ‘Aussie’ to trend bullishly against Pound Sterling. Interest rates and asset purchase targets were left on hold, but the accompanying meeting minutes were what traders had been waiting for. Hopes that the strong PMI readings of late would have improved the UK’s economic outlook were dashed, with the minutes noting that data between now and November’s policy meeting will have to be particularly supportive to justify a rate freeze instead of a cut. Sterling weakened significantly as economists quickly reiterated their predictions of a November rate hike, with a cut to 0.1% seen as the most likely course of action.
No economic data is due from the UK today.
Euro
At first glance the Euro seemed mixed yesterday, but a closer look at the gains recorded showed the common currency had little momentum of its own. The Euro was able to strengthen verses weakening currencies like the Australian Dollar and Pound Sterling, but against others like the Swiss Franc and New Zealand Dollar the single currency declined. Data was not supportive, with the trade balance surplus weakening by more-than-expected. Although finalised inflation figures confirmed that consumer prices grew last month after the previous decline, the overall weakness of the figures did not suggest the European Central Bank (ECB) would be able to end its stimulus measures any time soon.
The only data on the calendar for the Eurozone today is low importance second-quarter labour costs.
US Dollar
Poor data once-again softened the US Dollar, weakening bets of a Federal Reserve interest rate hike before the end of the year. Unemployment claims failed to rise as far-as-expected and the Philadelphia Fed index jumped from 2 to 12.8 instead of weakening to 1, but the headline advance retail sales figure declined by more-than-anticipated, with sales dropping -0.3% instead of the -0.1% fall predicted after July’s 0.1% growth. Fed hike bets slipped lower to show just a 0.1% majority in favour of an interest rate hike.
The US is the only nation to release impactful data today, with the consumer price index figures likely to have a strong bearing on Fed rate hike bets. Currently the core index is predicted to hold steady while the non-core index is forecast to see price growth rise from 0.8% to 1%.
Canadian Dollar
A listless Canadian Dollar remained weak after the recent slump in crude oil. The market may have been recovering, but notable gains for WTI Crude and Brent Crude still left the indices below US$44 and barely above US$46 per barrel respectively; hardly a strong position given that it was not overly long ago that the commodity had hit a yearly high of US$52 per barrel.
Only low-impact international securities transactions and manufacturing shipments data is due from Canada today.
New Zealand Dollar
The New Zealand Dollar was soft yesterday, despite the release of strong second-quarter GDP figures. The data didn’t quite live up to trader expectations; growth in the three months to June accelerated from 0.7% to 0.9% quarter-on-quarter rather than to 1.1% as predicted. The yearly growth rate surged from 2.8% to 3.6% in line with the median market forecast, however. But because the strength of the data had already been priced in to the ‘Kiwi’ there was little noticeable buoyancy from the New Zealand Dollar in the wake of the release.
Consumer confidence scores for September are the most prominent of New Zealand’s low impact data releases today.
Data Released
September 16th 11.00 NZD ANZ Consumer Confidence Index (SEP)
September 16th 22.30 CAD Manufacturing Shipments (MoM) (JUL) 1%
September 16th 22.30 USD Consumer Price Index (YoY) (AUG) 1%
September 16th 22.30 USD Consumer Price Index Ex Food & Energy (YoY) (AUG) 2.2%
September 17th 00.00 USD U. of Michigan Confidence (SEP P) 90.6