A 15-week high for Australian consumer confidence helped the Australian Dollar shake off the weight of other, less favourable, data releases. The ANZ Roy Morgan weekly consumer confidence index leapt from 113.4 to 120.1, with consumers feeling more optimistic on the general economic outlook. More Australians thought that the present was a good time to buy a household item – a 10.1% bounce on the last survey of 2016 – which bodes well for inflation. This helped the ‘Aussie’ resist depreciation, despite strong headwinds from weaker-than-expected Chinese inflation data.
Jobs vacancies data is the only ecostat on Australia’s economic calendar today.
AUD/GBP started off bullishly yesterday, but gains waned later in the session as the Pound began to recover. With another sign of ‘Hard Brexit’ from Theresa May over the weekend, traders were expecting further GBP depreciation. As a result many decided to short the currency, borrowing it from a broker and selling it on the market. When GBP exchange rates worsen, investors will buy it back and return the funds to their brokers, making a profit on the original sale. All that selling activity drove Sterling lower, but with investors now thoroughly positioned, Sterling was able to shrink ‘Aussie’ gains.
In the middle of a virtually-empty data week, today is uncharacteristically busy. Tonight’s UK data slew will include trade data and figures for industrial and manufacturing production, as well as construction output.
The Euro saw lacklustre trade yesterday, in part thanks to a virtual absence of domestic data. There were only three low-impact releases on the economic calendar, but these proved a mixed bag. French industrial production surged above forecasts from -0.1% to 2.2%, but the Finnish measure slowed from 4.4% to 3.7%. Irish consumer confidence also waned, dropping from 97.8 to 96.2.
There is no notable Eurozone data set for release today.
News of slowing Chinese inflation unsettled the markets yesterday, with many currencies registering losses to some extent. The US Dollar was also mixed, as weakness in the world’s second-largest economy could threaten the Federal Reserve’s plans to accelerate its policy normalisation cycle. Domestic data was positive, however, with consumer credit surging from US$16.18 billion to US$24.5 billion – over US$6 billion more than forecast – and the NFIB small business optimism index defying forecasts of a fall to post a strong rise from 98.4 to 105.8.
The only US data scheduled for release today is the MBA mortgage applications figure for the week ending January 6th.
Signs that the latest oil market sell-off had abated allowed the Canadian Dollar to recover some of the previous day’s losses yesterday. ‘Loonie’ advances were mild overall, however. What little domestic data there was proved supportive, with data from the Bank of Canada (BOC) showing that business held a strong outlook on future sales growth. The balance of companies expecting increased sales over the next 12 months rose to 26% in the fourth quarter, more-than double the previous quarter and the highest by far since 2014 Q3.
There is no Canadian data on the calendar today.
A lack of domestic data and a poor inflation report from China meant that the New Zealand Dollar fell against most of its peers yesterday, even weakening against Pound Sterling. Additionally, Chinese officials vowed to cut industrial capacity again, pointing to reduced demand and a weaker outlook for key minerals that New Zealand exports.
ANZ job advertisements is the only New Zealand data released today.
January 11th 08.00 NZD ANZ Job Advertisements (MoM) (DEC)
January 11th 11.30 AUD Job vacancies (NOV)
January 11th 20.30 GBP Total Trade Balance (Pounds) (NOV) -£3500
January 12th 23.00 USD MBA Mortgage Applications (JAN 6) 0.6%
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