- ‘Aussie’ Flops on Poor Trade Data – Surplus virtually evaporates
- AUD GBP Slips Lower as Markets Await Brexit News – UK government against the clock to resolve Irish border problems
- AUD EUR Down as Markets Favour Safe-Havens – German industrial data disappoints forecasts
- USD Higher, NZD & CAD Fall – Markets fear risk as Trump declares Jerusalem Israeli capital
Poor trade data saw the Australian Dollar slump yesterday. Although the performance of construction index from AiG leapt from 53.2 to 57.5 in November, October’s trade balance showed a huge slump in the surplus. Not only was September’s revised down to A$1.6 billion, but October’s trade windfall clocked in at just A$0.1 billion, against expectations of A$1.4 billion.
Although Australian loans data is set for release today, the ‘Aussie’ may find itself on sluggish form as markets await the latest US labour market data late tonight.
AUD/GBP was on choppy form yesterday, but the overall trend was unmistakably down. Sterling was volatile as markets awaited a new offer from the UK government on the issue of the Irish border after Brexit. News the European Council had given the government until Sunday to agree a deal lifted the pressure slightly; it had earlier been expected that Downing Street only had until later today.
The UK has an absolute deluge of data set for release today. Amongst industry output figures, trade balance data and GDP estimates, the latest estimate of consumer inflation expectations for the coming 12 months could cause volatility for the Pound.
The Australian Dollar slumped against the Euro as markets returned to safer assets, with geopolitical tensions dampening appetite for risk. Some of the day’s Eurozone data was disappointing, with German industrial production slumping -1.4% on the month instead of recovering from a -0.9% drop in September to record the forecast 0.9% expansion.
German trade balance figures for October are expected to show a narrowing of the enormous trade surplus, but this likely won’t worry markets, given it is still forecast to remain at an impressive €21.9 billion.
The US Dollar was on uncertain form to begin with, but appetite for USD quickly picked up on global political fears. Ironically this was due to a US development, after President Donald Trump announced that the States would recognise Jerusalem as the capital of Israel and relocate its embassy there from Tel Aviv. This caused widespread uproar and condemnation. Initial jobless claims figures declined for the third week running.
November’s non-farm payrolls report could have a notable impact upon the US Dollar, as it is one of the most influential releases on the US data calendar at any time.
The Canadian Dollar was slumping against its safer peers, thanks to a lack of risk-appetite. This was despite a strong performance from the latest building permits data. September’s figure was revised higher to 4.9% and October saw growth of 3.5% instead of the 1% economists had predicted.
Canadian housing starts figures for November are expected to show a minor slowdown in construction projects beginning.
New Zealand Dollar
Like the Australian Dollar and Canadian Dollar, the New Zealand Dollar was suffering from a lack of market appetite for risk assets yesterday. The only data, showing a strong uptick in house prices during November, was of little influence.
Today’s low-impact New Zealand data is likely to be ignored as markets focus on Chinese trade and US jobs reports.
December 8th CNY Trade Balance (NOV)
December 8th 10.30 AUD Home Loans (MoM) (OCT) -2%
December 8th 17.00 EUR German Trade Balance (OCT) €21.9b
December 8th 19.30 GBP BoE/TNS Inflation Next 12 Mths (NOV)
December 8th 23.15 CAD Housing Starts (NOV) 216k
December 8th 23.30 USD Change in Non-farm Payrolls (NOV) 195k
Post by TorFX