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As the Aussie and Kiwi Sink Focus Shifts to U.S Retail Sales and the USD

Bob Mason
It’s a litmus test for the U.S economy today. Retail sales and consumer sentiment figures will give the FED an idea of how consumers really feel.

Earlier in the Day:

Economic data was on the lighter side once more during the Asian session this morning.

New Zealand Business PMI figures for May and Japan’s finalized industrial production figures for April provided direction in the early part of the day.

For the Kiwi Dollar,

The Business PMI fell from 53.0 to 50.2 in May. According to the latest Business PMI Survey,

  • Production contracted in May, with the sub-index falling from 50.1 to 46.4.
  • New orders stagnated, with the sub-index falling from 52.2 to 50.4.
  • Employment also hit reverse, with the sub-index sliding from 51.4 to 48.6.
  • The dire numbers left the PMI at its lowest level since 2012.

The Kiwi Dollar moved from $0.65732 to $0.65608 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.52% to $0.6534.

For the Japanese Yen,

According to figures released by the Ministry of Economy, Trade, and Industry, industrial production increased by 0.6% in April. The finalized figures were in line with prelim and forecast. Industrial production had fallen by 0.6% in March.

The Japanese Yen moved from ¥108.326 to ¥108.331 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.06% to ¥108.32 against the U.S Dollar.

Elsewhere,

At the time of writing, the Aussie Dollar was down by 0.23% to $0.6899.

The Day Ahead:

For the EUR,

It’s another relatively quiet day ahead for the EUR.

French and Italian finalized May inflation figures are due out later this morning.

Barring a material deviation from prelims, we can expect the inflation figures to have a muted impact on the EUR.

From the U.S, retail sales and industrial production figures will have an impact on the pair later in the day, however.

Outside of the numbers, expect geopolitics and trade war chatter will have a greater influence on the day. The latest oil tanker attack in the Gulf of Oman could lead to rising tensions in the Middle East.

At the time of writing, the EUR was down by 0.04% to $1.1271.

For the Pound,

It’s also a quiet day ahead.

While there are no material stats due out of the UK, BoE Governor Carney is scheduled to speak later in the day. Any forward guidance on monetary policy will provide the Pound with direction on the day.

From Parliament, the leadership race and Brexit chatter will remain the main area of focus on the day.

With Boris Johnson the clear front runner, his views on Brexit will be of particular influence ahead of the next ballot.

At the time of writing, the Pound was flat at $1.2674.

Across the Pond,

It’s a big day for the Greenback. Key stats include May retail sales and industrial production figures and April business inventory numbers. Later on in the session, prelim June consumer sentiment figures will also influence.

While we can expect the markets to take a close look at today’s stats, retail sales will likely be the key driver on the day. Forecasts are Dollar positive.

As always, chatter from the Oval office will also need to be considered through the day. On top of the trade war with China, there’s also rising tension between the U.S and Iran to consider.

At the time of writing, the Dollar Spot Index was up by 0.07% to 97.081.

For the Loonie,

There are no material stats due out of Canada to provide direction to the Loonie.

Crude oil prices and the IEA’s monthly report will have some influence later in the day. On the geopolitical front, any chatter from Iran or the U.S will also need to be considered following the latest oil tanker attack in the Gulf.

The Loonie was down by 0.1% to C$1.3341, against the U.S Dollar, at the time of writing.

This article was originally posted on FX Empire

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