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Australia
Last week’s Employment numbers met consensus with 15,000 fulltime people and 5,000 part time people added to the workforce. The numbers fall in line with annual growth of around 2.0% forecast. However, most of the attention went towards the Unemployment Rate ticking up to 5.3% from 5.2% which sent the AUD lower across all currencies. Against the US Dollar it slipped below major support at 0.6665 posting a low of 0.6585. Risk improved towards the end of the week offering the Aussie some relief. This week’s data is limited to Private Capital Expenditure for the fourth quarter printing Thursday.
New Zealand
With the lack of local economic data last week the New Zealand Dollar was pushed around by offshore forces. At this stage it’s unclear how much the coronavirus will impact the New Zealand economy. It’s likely we could see a dire global fallout yet with the virus still on the rise. China has reported 630 new cases in Hubei with 96 more deaths in the last couple of days. Monday’s Retail Sales figures for the fourth quarter printed a little lower at 0.7% from the 0.8% down from the third quarter rise of 1.6% and 3.3% y/y down from 4.5% third quarter y/y numbers. With a slow data week again for the kiwi with just ANZ Business Confidence numbers Friday the kiwi could be further tested.
United States
The Fed (FOMC) minutes offered nothing new to recent monetary policy rhetoric with the current stance and rates to remain low for some time. Powell said the economy should remain on a solid footing citing recent positive data such as consumer confidence and residential construction investment. The Fed still sees a multitude of risks which could flare up, coronavirus is high on the list along with tensions in the Middle East. February Flash Producer Price Index took the US Dollar lower during the last trading session of the week when figures showed a contraction to 50.8 against a protected 51.5 in the index. This shows the first sign of the virus’s impact on the American economy. The index posted 53.1 in January from a rise of 52.7 in December. Coronavirus shows the rapid turnaround in growth but it’s too early to tell if this is a trend or not.
United Kingdom
UK Manufacturing accelerated to its strongest in ten months to February 2020 Friday with the index releasing at 51.9 versus 49.7 expected. The English Pound finished the week well against its peers, the strongest currency since late Thursday sessions. Boris Johnson will start trade talks with US officials within the next few days with US Trade negotiator saying he is making the US/UK trade discussions a priority in 2020. BJ is expected to lay out his demands for US based drug and health companies who have access to the British markets. It’s a quiet week for UK data with just the Bank of England chief economist talking today.
Europe
After poor German Economic Sentiment sent the Euro further into the red last week, we have seen a sharp turnaround in the Euro Friday with the publications of Eurozone Manufacturing numbers. Both French and German Manufacturing for February surprised markets with the index rising to 49.1 from 47.1. These figures represent the best numbers in six months despite demand being hit by the coronavirus outbreak. We should see further momentum in the Euro crosses over the week especially with only German Business Climate figures to release. Coronavirus could dominate headlines.
Japan
The Coronavirus stricken Diamond Princess has confirmed the death of two passengers who were hospitalised earlier. As of yesterday figures in Japan have worsened, one of the biggest coronavirus sites outside China. Japan officials have also started to limit public gatherings to stop the spread. With the Japanese economy shrinking at its fastest pace in six years in the December quarter, manufacturers are struggling to obtain crucial parts for production lines with Chinese factories mostly shut down. Market focus is with Japanese Unemployment figures for January and Retail Sales both publish Friday
Canada
Yearly inflation surprised to the upside coming in higher than the 2.2% markets were expecting at 2.4% through to the month of December. The Loonie rallied post data on renewed demand also assisted by rises in Crude Oil. Retail Sales printed benign Friday at 0.0% after 0.1% was predicted. Canada has 7 people infected by coronavirus with 3 recovering. Looking ahead this week we have Canadian Current Account and GDP m/m.
Major Announcements
- Australian Unemployment Rate rises to 5.3%
- UK y/y CPI up to 1.8% from 1.6%
- Fed maintains policy tone with rates to stay low for some time
- French and German Manufacturing improve in January
- NZ Retail Sales last quarter 2019 worsened slightly
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