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Economic Data, Brexit, and the U.S Presidential Debate to Keep the Markets Busy

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Bob Mason
·6 min read
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Earlier in the Day:

It’s was a particularly busy start to the day on the economic calendar this morning. All the majors were in action through the Asian session, with economic data from China also in focus.

While the stats provided direction, the 1st U.S presidential debate was in full swing early this morning, limiting the impact of the stats.

For the Kiwi Dollar

Building consents and business confidence figures were in focus.

In August, building consents rose by 0.3%, partially reversing a 4.6% slide from July.

The Kiwi Dollar moved from $0.65820 to $0.65853 upon release of the figures that preceded business confidence figures.

Of greater significance, however, was business confidence in September.

The ANZ Business Confidence Index rose from -41.8 to -28.5, which was down from a prelim -26.0. In August, the index had stood at -31.8.

According to the latest ANZ Report,

  • Activity indicators were up a little on the prelim numbers, while the headline figure was lower.

  • Investment and employment intentions and profit intentions were also up.

  • Agriculture and construction were the most optimistic sectors. Services and retail were the least optimistic.

The Kiwi Dollar moved from $0.66010 to $0.66056 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.27% to $0.6606.

For the Japanese Yen

Industrial production and retail sales figures were in focus.

In August, industrial production rose by 1.7%, following an 8.7% jump in July. Economists had forecast a 1.5% rise.

According to the Ministry of Economy, Trade, and Industry,

Industries that mainly contributed to the increase were:

  • Motor vehicles, iron, steel, and non-ferrous metals, and electronic parts and devices.

Industries that mainly contributed to the decrease were:

  • Production machinery, electrical machinery, and information and communication electronics equipment, and pulp, paper, and paper products.

Forecasts for September were revised upwards from a 1.9% increase in production to a 5.7% increase. Industrial production is projected to rise by 2.9% in October.

According to the Ministry of Economy, Trade, and Industry, retail sales fell by 1.9%, following a 2.9% decline in July. Economists had forecast a 3.5% decline.

The Japanese Yen moved from ¥105.672 to ¥105.693 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.03% ¥105.69 against the U.S Dollar.

Out of China

It was a particularly busy morning. Key stats included September’s NBS private sector PMIs and the market’s favored Caixin Manufacturing PMI.

In September, the NBS Manufacturing PMI rose from 51.0 to 51.5. Economists had forecast a rise to 51.2. The NBS non-manufacturing PMI increased from 55.2 to 55.9, leading to a rise in the composite from 54.5 to 55.1.

The Aussie Dollar moved from $0.71341 to $0.71334 upon release of the NBS figures that preceded the Caixin number.

In September, the Caixin Manufacturing PMI slipped from 53.1 to 53.0. Economists had forecast a PMI of 53.1.

According to the September survey,

  • Firms reported further marked increases in production and new orders.

  • New business expanded at the strongest pace since January 2011, supported by solid export sales.

  • Employment stabilized, ending eight consecutive months of job shedding.

  • Operating margins remained under pressure, however. Firms reported a marked increase in input costs, while output costs rose marginally.

  • Optimism improved to a 3-month high.

The Aussie Dollar moved from $0.71369 to $0.71381 upon release of the PMI.

For the Aussie Dollar

Building approvals and private sector credit figures were in focus.

With geopolitics and private sector PMI numbers out of China, however, the stats had a muted impact on the Aussie Dollar.

Building approvals fell by 1.6%, while private sector credit stalled in August.

The Aussie Dollar moved from $0.71449 to $0.71369 upon release of the figures that preceded China’s Caixin survey numbers. At the time of writing, the Aussie Dollar was up by 0.08% to $0.7136.

The Day Ahead:

For the EUR

It’s a busier day ahead on the economic calendar. Key stats include French and German retail sales figures and German unemployment numbers. Prelim inflation figures for France, Italy, and the Eurozone are also due out.

Expect the retail sales and unemployment figures to have the greatest impact. There will be some interest in the Eurozone inflation figures, however. Any further buildup of deflationary pressure would test support for the EUR.

Away from the economic calendar, there’s also Brexit, COVID-19, and the 1st U.S presidential debate to consider.

At the time of writing, the EUR was up by 0.03% to $1.1748.

For the Pound

It’s a busy day ahead on the economic calendar. Key stats include finalized GDP and business investment figures for the 2nd quarter.

Expect any revisions to influence though the key driver on the day will be Brexit as talks continue.

At the time of writing, the Pound was up by 0.03% to $1.2867.

Across the Pond

It’s a relatively busy day ahead for the U.S Dollar. Key stats include finalized 2nd quarter GDP numbers, Chicago’s September PMI, and ADP nonfarm employment change figures for September.

Barring any deviation from previous estimates, expect the ADP numbers to have a greater impact.

While the stats will influence, the U.S presidential debate will be the key driver in the early part of the day.

The Dollar Spot Index was down by 0.06% to 93.832 at the time of writing.

For the Loonie

It’s a quiet day ahead, with no material stats to provide the Loonie with direction.

A lack of stats will leave the Loonie in the hands of economic data from China and the U.S and the 1st debate…

The weekly EIA inventory numbers will also provide direction later in the day.

At the time of writing, the Loonie was down by 0.01% to C$1.3390 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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