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The Weekly Wrap – Economic Data, COVID-19 Vaccine News, and Geopolitics Were in Focus

Out of the U.S

It was a busier week on the economic data front.

Key stats included inflation, retail sales, and jobless claims figures, which were market risk positive.

Early in the week, a pick in inflationary pressure failed to spook the markets. In spite of the annual core rate of inflation accelerating to 1.6%, the FED’s assurance of unwavering support was key.

In the week ending 9th April, initial jobless claims decreased from 769k to 576k. Economists had forecast a decline to 700k.

In the month of March, retail sales jumped by 9.8%, reversing a 2.7% decline from February. Core retail sales rose by 8.4%, reversing a 2.5% decline from February.

Economists had forecast retail sales to rise by 5.9% and for core retail sales to increase by 5.0%.

From the manufacturing sector, the Philly FED Manufacturing PMI fell from 51.8 to 50.2 in April. Economists had forecast a sharper decline to 42.0, however.

At the end of the week, stats were also skewed to the positive. The Michigan Consumer Sentiment Index rose from 84.9 to 86.5 in April, according to prelim figures.

In the equity markets, the NASDAQ rose by 1.09%, with the Dow and the S&P500 gaining 1.18% and 1.37% respectively.

Corporate earnings supported the indexes in the week.

Out of the UK

It was a relatively busy week.

Industrial and manufacturing production, trade, and GDP figures were in focus in the week.

It was a mixed set of numbers for the Pound.

While industrial and manufacturing production partially recovered from declines in January, trade data disappointed. Manufacturing production increased by 1.3% in February, after having fallen by 2.3% in January.

The UK’s trade deficit widened from £12.59bn to £16.44bn in February. While exports to the EU picked up, it was with the rest of the world that led to the sharp widening.

In February, the UK’s trade deficit with non-EU countries widened from £4.46bn to £10.73bn.

GDP numbers also disappointed. The economy grew by just 0.4% in February, partially recovering from a 2.2% contraction in January.

In the week, the Pound rose by 0.53% to end the week at $1.3779. In the week prior, the Pound had fallen by 0.90% to $1.3707.

The FTSE100 ended the week up by 1.50%, following a 2.65% loss from the previous week.

Out of the Eurozone

It was a busy week on the economic data front.

Key stats included Eurozone retail sales, industrial production, and trade data along with economic sentiment figures for Germany and the Eurozone.

It was a mixed set of numbers for the EUR.

Retail sales rose by more than expected in February, while industrial production hit reverse.

Economic sentiment figures for Germany and the Eurozone disappointed Sentiment waned in both Germany and the Eurozone.

For Germany, the ZEW Economic Sentiment Index fell from 76.6 to 70.7, while the Eurozone’s declined from 74.0 to 66.3.

At the end of the week, the Eurozone’s trade surplus widened from €11.0bn to €17.7bn, delivering a positive spin at the end of the week.

Throughout the week, inflation figures for member states and the Eurozone were aligned with prelim figures. The pickup in inflationary pressures delivered EUR support in the week.

For the week, the EUR rose by 0.66% to $1.1977. In the week prior, the EUR had risen by 1.19% to $1.1899.

The CAC40 rallied by 1.91%, with the DAX30 and EuroStoxx600 ending the week with gains of 1.48% and 1.20% respectively.

For the Loonie

It was a quieter week.

Manufacturing sales and wholesale sales figures were in focus in the week.

The stats had a muted impact on the Loonie, however, with market sentiment towards crude oil demand providing support. WTI and Brent ended the week up by 6.42% and by 5.90% respectively.

From the Bank of Canada, the BoC’s business outlook survey reflected a pickup in optimism amongst businesses in Q1. The timing of the survey, however, muted the impact as a pickup in new COVID-19 cases and fresh containment measures were introduced after the survey dates.

In the week ending 16th April, the Loonie rose by 0.22% to C$1.2503. In the week prior, the Loonie had risen by 0.38% to C$1.2530.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 16th April, the Aussie Dollar rose by 1.46% to $0.7734, with the Kiwi Dollar ending the week up by 1.55% to $0.7142.

For the Aussie Dollar

It was a relatively busy week.

Key stats included business and consumer confidence and employment figures.

It was a mixed set of stats for the Aussie Dollar.

Business confidence softened modestly in March, while consumer sentiment improved in April.

The numbers were Aussie Dollar positive ahead of the all-important employment figures late in the week.

In March, Australia’s unemployment rate fell from 5.8% to 5.6% in spite of a rise in the participation rate. Another marked increase in employment led to the fall in the unemployment rate. It was noteworthy, however, that full employment fell in the month.

For the Kiwi Dollar

It was also a relatively busy week.

Early in the week, business confidence and electronic card retail sales were in focus.

The stats were Kiwi Dollar positive. Business confidence improved in the 1st quarter, with retail sales on the rise after a slide in February.

At the end of the week, the business PMI jumped from 53.4 to an all-time high 63.6 in March. A sharp increase in new orders and production drove the PMI to its all-time high.

On the monetary policy front, the RBNZ was also in action. While holding rates steady, the rate statement tested the Kiwi Dollar mid-week. Talk of a willingness to cut the cash rate further amidst a slowdown in the recovery pegged the Kiwi back.

For the Japanese Yen

It was a quiet week.

There were no material stats to provide the Yen with direction.

The lack of stats left core machinery orders in focus mid-week, which took an unexpected slide in February.

While the numbers drew interest, concerns over a fresh spike in new COVID-19 cases, geopolitics, and a weaker Greenback delivered Yen support.

The Japanese Yen rose by 0.79% to ¥108.80 against the U.S Dollar. In the week prior, the Yen had risen by 0.92% to ¥109.67.

Out of China

It was a busy week on the data front.

In the first half of the week trade data impressed, with exports surging by 49.0% and imports by 38.1%.

At the end of the week, GDP and industrial production figures were also in focus.

In the 1st quarter, the China economy expanded by 0.6%, quarter-on-quarter, following 2.6% growth in the 4th quarter. Economists had forecasted growth of 1.5%.

Year-on-year, the economy expanded by 18.3%, versus a forecasted growth of 19.0%. In the 4th quarter, the economy had expanded by 6.5% year-on-year.

Industrial production was up by 14.1% in March, year-on-year, falling short of a forecasted 17.2% rise. In February, industrial production had risen by 35.1%.

Other stats from China included fixed asset investment, unemployment, and retail sales figures.

Fixed asset investment rose by 25.6% year-on-year, coming in ahead of a forecasted 25.0% rise. In February, fixed asset investment had increased by 35.0%.

Retail sales increased by 34.2%, which was better than a forecasted 28%. In February, retail sales had risen by 33.8% year-on-year.

Finally, the unemployment rate fell from 5.5% to 5.3% in March. Economists had forecast for unemployment to hold steady at the end of the quarter.

In the week ending 16th April, the Chinese Yuan rose by 0.49% to CNY6.5206. In the week prior, the Yuan had risen by 0.22% to CNY6.5526.

The CSI300 fell by 1.37%, while the Hang Seng ended the week up by 0.94%.


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