The Dollar was on the back foot through the early part of the day as the markets responded the softer wage growth figures, giving Asian equities a solid start to the week. Trade talk will continue to be in focus, with Brexit noise likely to influence the Pound, with no material stats to consider.
Earlier in the Day:
It was a quiet start to the week on the economic calendar this morning, with key stats out of Asia limited to Japan’s BSI Large Manufacturing Conditions index figure for the 1st quarter.
While the index slipped from 9.7 to 2.9, sitting well below a forecasted 10.30, the BSI Manufacturing Index was projected to fall to -1.5 in the 2nd quarter, before rising to 6.1 in the 3rd quarter.
The Japanese Yen moved from ¥106.947 to ¥106.884 against the U.S Dollar upon release of the figures, which follow on from the disappointing industrial production number for January, released at the end of February, supporting a softer growth outlook for the first quarter. At the time of writing, the Yen was up 0.16% to ¥106.65 against the Dollar.
Elsewhere, the Aussie Dollar was up 0.34% to $0.7871, with Trump’s talk of favourable trade terms for Australia providing support, coupled with the weaker U.S Dollar stemming from the softer than expected wage growth figures released on Friday.
In the equity markets, the majors were on the move, following last week’s nonfarm payroll and wage growth figures.
The Nikkei and ASX200 closed out the day with gains of 1.65% and 0.55% respectively, while the Hang Seng and CSI300 were up 1.53% and 0.46% respectively at the time of writing. For the Nikkei, much will now depend on whether the U.S will grant exemptions on tariffs.
The Day Ahead:
For the EUR, there are no material stats scheduled for release this morning to provide the EUR with direction, leaving the markets to consider the outlook towards ECB monetary policy and whether the latest U.S trade tariffs could widen to cover more significant European goods that could ultimately weigh on the Eurozone economy.
The U.S President has certainly raised awareness and not it will be down to the EU to find common ground, which should be more likely than not, as long as the EU doesn’t try to strong arm the U.S in similar fashion to the weigh it has negotiated on Brexit.
At the time of writing, the EUR was up 0.11% to $1.2321, with Friday’s softer U.S wage growth figures seeing the probability of a 4th rate hike this year ease.
For the Pound, it’s a quiet day on the economic calendar, giving the markets time to consider last week’s disappointing trade and manufacturing numbers, while Brexit will continue to be the main driver near-term, as the British government looks to get some concessions on its way out of the EU.
At the time of writing, the Pound was up 0.06% to $1.3859, with the early gains coming off the back of a softer Dollar than any material shift in sentiment towards the Pound, the Pound down 0.05% against the EUR.
Across the Pond, with no material stats scheduled for release this afternoon, the Dollar will likely be influenced by demand for this afternoon’s note auctions and the release of the February federal budget balance, which is forecasted to hit a $222.3bn deficit.
Friday’s wage growth figures left the Dollar on the back foot this morning, with the Dollar Spot Index down 0.07% to 90.031, giving up gains from the early part of the Asian session.